• Replies 27 replies
  • Subscribers 87 subscribers
  • Views 3337 views
  • Users 0 members are here
Options
Related
Hints and tips
  • To quote someone's message, first select/highlight the relevant text, and then use the Quote button that appears
  • To "mention" someone, type @ followed by the start of the forum name, and choose from the list; that person will get a notification of being mentioned

Renting? Shared Ownership?

andi

Hey I know I keep going on about moving I’m just finding it hard and I don’t think my folks get it so I can’t really talk to them much. 
looking at renting isn’t really going great I’m just struggling with the whole concept. However it struck me today that rather then saving for a home and renting why don’t I do shared ownership. But then I don’t really know what that is where it would lead me and what happens so could someone please explain to me what shared ownership is? In simple terms because Google is confusing me and what the pros and cons are 

Parents

  • Shared ownership is where you own a percentage of the house which is paid by mortgage and also pay rent on the other part that you don’t own. You will still need to save a deposit and pay legal fees but the deposit will be smaller than buying the whole house. You will also have the option to buy a larger share of the house in the future and pay less rent. I have heard that they can be very difficult to sell though and a flat will also be subject to extra maintenance fees. My brother is using an inheritance to buy a large share of a property outright then pay cheap rent, that’s probably the best way to do it

  • in reply to GuybrushThreepwood

    Is it better than just renting? I can’t afford a mortgage outright yet and I guess renting in the long run would end up being more expensive?

Reply Children
  • in reply to andi

    The more deposit you can afford to put down the smaller the mortgage payments will be on a small share of a property. Or if you use a larger deposit to buy a bigger share then the rent payment will be less. Have you considered talking to a mortgage advisor? They take your bank statements and payslips and put all the numbers into their software and it tells them what you can afford to do. Might give you a clearer answer because they’ll have all the specific details about your finances

  • in reply to GuybrushThreepwood

    I’ve looked at a couple and you pay the standard deposit and the rent then becomes So much less like council property rent less than and it seemed like such a good idea at the time but I’m gullible I know that and just want to know what I would be getting myself into if I chose that route 

  • in reply to Iain

    Don’t get me wrong. I made mistakes and it’s cost me a lot of money. 10 grand in my savings trying to help my significant other and bailing him and his kids out of things. So yes I made some stupid mistakes and if I didn’t I could probably have enough for a house so yes I was stupid but now I’m trying correct but it feels too late 

  • in reply to Iain

    I don’t really have a year, my end goal is a little 2-3 bed house. Get a mortgage and just live there for the rest of my life. However it’s so hard right now. I’m saving as Much as I can and now my wages have gone up hopefully my savings will go up faster but everything is so so expensive now and it’s so disheartening. I’m doing my driving lessons but I can’t afford a car, I get a decent wage for my age and experience but I can’t afford to move out. Life just seems like a massive catch 22 

  • in reply to andi
    andi said:
    Is it better than just renting?

    I used to work for a company that built and sold these as part of its property portfolio and the whole model is designed to take as much money from you as possible.

    If the property rises in value, you have to share any profit with them when you sell.

    If the property drops in value, you have to take all the loss when you sell.

    Management fees are a way they take a lot more from you than they spend on delivering the services that these fees are for.

    Appeal for shared ownership is really only there when the market is in a very overvalued state so if times get difficult it becomes incredibly hard to sell it.

    Do some research online - that can be ok in specific circumstances but I suspect it is not a good deal for you to consider just to "get on the ladder" as you will find it near impossible to move to a different rung.

    I believe it better to wait that extra year, build up your deposit that bit more and maybe buy in conjunction with friends with a clear contract to work from if you have to get out on your own.

  • in reply to andi

    I think that would depend on your circumstances, you would probably still need at least 5-10k in savings to cover the mortgage deposit and fees for a shared ownership property which is completely out of reach for a lot of people. It’s also a good idea to have extra savings on top of the mortgage deposit & legal fees to cover emergency repairs etc. The exact prices will depend on the property value, the percentage you are buying and how much deposit you are paying but when you add the shared ownership mortgage, rent and service charge together it may not be much less than renting a similar property. There are some calculators online if you know the numbers you’re working with, I think ShareToBuy has a good one