Housing Association.......worth it?

[beanbag]

I'm 22, on my first proper job since leaving university and I'm now planning my next major step in life.....buying a home. I've looked at many options and have found the only way for me to get a reasonable mortgage is for my father to stand as a guarantor which he's happy to do. This would give me about £130k to play about with. However, I found some homes near where I live with my parents in a nice area which are in the Housing Association scheme and are proving to be a very attractive offer. They are brand new homes and I could pick a two bedroom flat up for just £90k. That would leave money left over to buy items for the home and decorate it. It also means a smaller mortgage to pay off but its still a good foot in the door for the next house I end up buying. Is it worth doing this or is there a catch with the fact that you only own 50% of the property? I get the opportunity to buy the rest after a certain number of years so it could prove to be a viable opportunity for a first time buyer like myself or am I falling into a trap of some sort? Is there anyone else here who's done the same?

[B17NNS]

the catch is that you only own 50% of the property. Remember that you if or when you choose to buy the other 50% it will have increased in value in line with the 50% you have bought.

You will also have to pay rent for the other half.

[bigandclever]

My understanding is that you would buy (usually) 50% of the property, and pay rent to the Housing Association on the rest.

It worked for my cousin, because house prices went up sufficiently that the equity she had effectively meant she had enough 'saved' to buy her next home outright. The Housing Association found someone else to take on her 50% of the first property. She couldn't get enough capital together to buy the 50% of 'her' house to buy out the Housing Association.

Don't know what would happen if house prices went down though... the housing association will be in it for the long term, so would be in a better position to cope with negative equity (epsecially so, since you'll still be paying them some money in the form of rent).

Demand is usually high, and you may not be a 'suitable' candidate. My cousin moved up the list because she is a primary school teacher.

[beanbag]

Aha, but can it be beneficial to a first time buyer like myself or should I avoid something like this?

Rent and mortgage could work out quite expensive when combined!

[Incorrigible]

Entirely up to you

If the market goes up you're better off skinting yourself in the short term and buy out right

If it goes down you're better off not buying at all

If you want to bet a little less this is a good option, also if all the property in the block are like this then everyone will be taking more care of the property than if it was rented

IMO property has never been a bad long term investment, but there are always slightly better times to buy and sell. I've no crystal ball to give an accurate prediction, but personally I'm selling a few and waiting a year