Share of purchased house
Discussion
Do you mean 'shared ownership'? It's really nothing new. Not always 50/50 split; It's sometimes tailored to whatever prospective buyers can afford. The idea being that they increase the ownership share over time, buying more and renting less of the property.
It can be useful for getting on the property ladder, but currently it's in the news because management companies are being stupid with 'service charges'; ie, greedy.
A good idea, just not as shiny and wholesome as it once was.
It can be useful for getting on the property ladder, but currently it's in the news because management companies are being stupid with 'service charges'; ie, greedy.
A good idea, just not as shiny and wholesome as it once was.
My first house was shared ownership, bought 30% in 1984. I bought another 30%, then the final 40%.
Worked out well for me, buying more each time I got a pay rise. The "share" price was fixed, and I also got a bit of a discount because I was moving from a local authority flat (Milton Keynes Development Corporation).
The downsides were that I was potentially liable for all maintenance, and the legal fees for buying each share.
The upsides were I got a house built to "council specs" (proper brick, not timber frame) for a very fair price that I could afford.
Worked out well for me, buying more each time I got a pay rise. The "share" price was fixed, and I also got a bit of a discount because I was moving from a local authority flat (Milton Keynes Development Corporation).
The downsides were that I was potentially liable for all maintenance, and the legal fees for buying each share.
The upsides were I got a house built to "council specs" (proper brick, not timber frame) for a very fair price that I could afford.
https://www.bbc.co.uk/news/articles/clyz8m8jj4mo
Recent article that's probably one sided but still useful
Recent article that's probably one sided but still useful
One of the news outlets (may have been Telegraph on Saturday last) had an article about this and some people where the contract stipulated who had first option to buy their part if they wanted to sell.
Not sure if this is rampant or they had a specifically bad contract but I guess that’s one thing to be aware of.
Not sure if this is rampant or they had a specifically bad contract but I guess that’s one thing to be aware of.
Arrivalist said:
One of the news outlets (may have been Telegraph on Saturday last) had an article about this and some people where the contract stipulated who had first option to buy their part if they wanted to sell.
Not sure if this is rampant or they had a specifically bad contract but I guess that s one thing to be aware of.
Yeah, that was the case 20 years ago when my then-wife and I bought and sold our 35% of a flat. The housing association had first dibs on selling it. Think they had 3 months iirc. Sold it to the 2nd viewer. It's only fair, really. Keeps it for those that need it, rather speculators or landlords. Not sure if this is rampant or they had a specifically bad contract but I guess that s one thing to be aware of.
Step son has used it to good effect. Started on a 40% share and is now up to 75% IIRC taken him about 8 years as a single guy doing it all himself (we are pretty proud of him). He plans to staircase the last 25% when his mortgage rate is up in a couple of years. When used correctly it really can be a very useful way onto the ladder but it's not for everyone and you have to want to increase the amount you own over time
One thing, our contract (21 years ago!) stated that any money paid in rent would count towards purchasing if we increased our share. That is to say the rent we paid would be deducted from the asking price of the remainder of the property. We never actually utilised this facility, mainly because we sold our share after 3 years. It was a good deal... And I'd be surprised if such deals were still available.
Thanks for all the info, being from a period when such things were not even imagined it seems to be quite a convenient process, as long as there are no ridiculous/stringent, restrictions/covenants.
The daughter and her "partner" are looking at moving but are abit strapped for cash at the moment, so it would suit them, particularly if as one poster indicated the rent would count to the purchase at a later .
The daughter and her "partner" are looking at moving but are abit strapped for cash at the moment, so it would suit them, particularly if as one poster indicated the rent would count to the purchase at a later .
My Ex bought a shared ownership retirement flat a couple of years ago to free up some cash for her holiday fund as her closest living relatives are cousins she hasn't seen since for nearly 20 years.
But she has to pay maintenance as well as rent on the share she doesn't own, but then she presumably can't be evicted if she owns a share.
But she has to pay maintenance as well as rent on the share she doesn't own, but then she presumably can't be evicted if she owns a share.
These schemes feed a lot of ponces and middlemen.
You're pretty much talking about new builds, so there's a premium for that.
Most people on the development will either also be too poor to buy something else outright or they will be 'claimants'.
So it can be an expensive way to buy into a crap neighbourhood.
You need to understand every rule and detail of the scheme, and ignore drivel about other schemes, what somebody's cousin had last century etc.
You're pretty much talking about new builds, so there's a premium for that.
Most people on the development will either also be too poor to buy something else outright or they will be 'claimants'.
So it can be an expensive way to buy into a crap neighbourhood.
You need to understand every rule and detail of the scheme, and ignore drivel about other schemes, what somebody's cousin had last century etc.
Mr Tidy said:
My Ex bought a shared ownership retirement flat a couple of years ago to free up some cash for her holiday fund as her closest living relatives are cousins she hasn't seen since for nearly 20 years.
But she has to pay maintenance as well as rent on the share she doesn't own, but then she presumably can't be evicted if she owns a share.
She can still be evicted if she doesn't keep up the rent/service charges. Terms of the lease. Repossession just like defaulting on a mortgage. It's why SO is getting bad press atm; too many people are finding their service charges have gone from hundreds to thousands and there's nothing they can do about it. They have to keep paying. The increases have also rendered the properties unattractive to potential buyers so they can't sell either. Trapped.But she has to pay maintenance as well as rent on the share she doesn't own, but then she presumably can't be evicted if she owns a share.
Shared ownership can still work for some, but it's nowhere near as good as it was.
Lo-Fi said:
Do you mean 'shared ownership'? It's really nothing new. Not always 50/50 split; It's sometimes tailored to whatever prospective buyers can afford. The idea being that they increase the ownership share over time, buying more and renting less of the property.
It can be useful for getting on the property ladder, but currently it's in the news because management companies are being stupid with 'service charges'; ie, greedy.
A good idea, just not as shiny and wholesome as it once was.
The service charge problem has been around for years, I know one person, a keyworker, who did shared ownership, the Man Co put her service charge up so high that she lost her home. This was in the early 2000's. Shocking TBHIt can be useful for getting on the property ladder, but currently it's in the news because management companies are being stupid with 'service charges'; ie, greedy.
A good idea, just not as shiny and wholesome as it once was.
Lo-Fi said:
She can still be evicted if she doesn't keep up the rent/service charges. Terms of the lease. Repossession just like defaulting on a mortgage. It's why SO is getting bad press atm; too many people are finding their service charges have gone from hundreds to thousands and there's nothing they can do about it. They have to keep paying. The increases have also rendered the properties unattractive to potential buyers so they can't sell either. Trapped.
Shared ownership can still work for some, but it's nowhere near as good as it was.
She might be OK as it is run by a local Housing Association and only 50% is shared ownership. So if they evicted her presumably they'd have to rehouse her!Shared ownership can still work for some, but it's nowhere near as good as it was.
Mr Tidy said:
Lo-Fi said:
She can still be evicted if she doesn't keep up the rent/service charges. Terms of the lease. Repossession just like defaulting on a mortgage. It's why SO is getting bad press atm; too many people are finding their service charges have gone from hundreds to thousands and there's nothing they can do about it. They have to keep paying. The increases have also rendered the properties unattractive to potential buyers so they can't sell either. Trapped.
Shared ownership can still work for some, but it's nowhere near as good as it was.
She might be OK as it is run by a local Housing Association and only 50% is shared ownership. So if they evicted her presumably they'd have to rehouse her!Shared ownership can still work for some, but it's nowhere near as good as it was.
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