Sunday Express Skeleton 24Th November...
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Shared Ownership
6 Answers
Morning!
Has anyone done this and are there any pitfalls? Really don't know much about it so any advice would be great.
Has anyone done this and are there any pitfalls? Really don't know much about it so any advice would be great.
Answers
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OK - will try! a local building company are building 1 bed flats in a brand new block. The flats are valued at £140,000 - so they suggest you buy (with a mortgage/cash) 50% the property. The other £70K you rent.
Think its mainly to help 1st time buyers get on the property ladder.
So just wondered if it sounds a safe idea and if anyone here had done it. Many thanks!
Think its mainly to help 1st time buyers get on the property ladder.
So just wondered if it sounds a safe idea and if anyone here had done it. Many thanks!
I would check you are eligible first sally as sometimes, but not always, the scheme is open to key workers only, ie nurses, teachers etc who work in the vicinity. The rent you pay on the portion of the property you don't own is subsidised so is slightly below the market rate for your area. If you can't get a big enough mortgage on a non Shares Ownership property then it is definitely something to consider. I know a couple of young people who have done it and are very pleased they did.
The Key Workers scheme was set up for those defined as a key worker and it was (or is) particularly financially attractive in the terms provided.
There are loads of other shared equity schemes, and the principle is always the same - you buy part of the house on a mortgage and rent the rest of the property from a housing association that owns the rest of the equity. With most schemes you can increase your share of the equity late if you wish to.
The advantage is that you pay less out in total mortgage and rent than if you had a mortgage for 100% of the equity.
You need to check the terms to discover any advantages, but it is common that the HA has the right to determine the selling price (initially) if you want to sell, and only after x weeks with the house not selling can you determine a lower price. That has been a problem for some people in a falling property market.
There may be other constraints on the property - you may not have a choice as who insures the property, for example.
However many people do find it to be a way of starting out on the property ladder, especially if they cannot afford the whole mortgage repayment.
There are loads of other shared equity schemes, and the principle is always the same - you buy part of the house on a mortgage and rent the rest of the property from a housing association that owns the rest of the equity. With most schemes you can increase your share of the equity late if you wish to.
The advantage is that you pay less out in total mortgage and rent than if you had a mortgage for 100% of the equity.
You need to check the terms to discover any advantages, but it is common that the HA has the right to determine the selling price (initially) if you want to sell, and only after x weeks with the house not selling can you determine a lower price. That has been a problem for some people in a falling property market.
There may be other constraints on the property - you may not have a choice as who insures the property, for example.
However many people do find it to be a way of starting out on the property ladder, especially if they cannot afford the whole mortgage repayment.
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