Housing Association

[Noseyparker]

How does H. A. work when sharing a mortgage with them and how does someone become eligible. Thanks in anticipation.

[milldoll]

Hi Noseyparker. I live in a shared ownership house, but not one built by the association. I own half the value of the house and bought the other half outright 15 years ago. At the time it was the only way of me getting a house of my own.
I bitterly regret this arrangement now as I pay rent on the other half, pay gross buildings insurance to the HA and get no help at all with any problems with the house. And all the time the value is rising and I'm making the house really nice, the HA sit back and reap the benefits. I'm now in a catch 22 situation as I'll never be able to afford to buy the other half so I'm stuck forever........unless I win the lottery of course!!!!
I'm not too sure what the eligibility rules are now, I had to have no other means of buying and be unable to get a full mortgage on the wages I earned at the time. Also had to prove I could afford the rent!!!

[SRH]

It's a tough one. I'm in the process of buying a share in a flat because it's the only way I can get on the ladder. I'm getting a mortgage for 75% of the flat and will then pay rent on the other portion. The amount of rent is set by each housing association and varies wildly - some properties just aren't worth considering cause the rent is as much as that percentage of mortgage. Check your figures before making a decision. I'm buying new build directly from the HA and have had to prove that I don't earn enough to buy the flat outright but I have enough to pay the mortgage, rent and service charge (catch 22!) Luckily, I've been accepted but it took several months for my application to go through. I also had to prove that I have to live in the area (my job is there and I'm doing a 80 mile round trip commute every day). With part ownership you only make any profit on your percentage, but, on the other hand, this is less of a risk if the housing market is unsteady. Also, with many schemes you can buy out further shares in the property in years to come (known as 'staircasing'). Mine becomes eligible after a year and hopefully by then I might be in a better position to pay the full mortgage and buy the flat outright. I'm also happier about the fact that all my neighbours will be (at least for the first year) owner-occupiers and not tenants. Finally (and I thought I was going to keep this brief!) only a handful of mortgage lenders will do shared ownership mortgages (such as Nationwide) and they take much longer to process. But, hopefully, it will be worth it in the end - I think more people will be doing this in future as the gap between wages and properties widens. Good luck!