New Supply Shared Equity Property
Discussion
Does anyone have any experience of buying property through a NSSE scheme?
There's a development near to me in a decent area that's soon to be built (1, 2, 3 & 4 bedroom properties).
As a first time buyer who would be buying alone I was thinking of perhaps going down this route to make it more affordable and then increase my stake as the years go by.
There are already 1 bedroom properties for sale around me however most need new kitchens/bathrooms/roofs and aren't in the best of areas hence looking at this option.
I should say i'm in Scotland and there would be no rent payable on the share the government owns plus as far as I understand it would also be a share of a freehold and not a leasehold?
There's a development near to me in a decent area that's soon to be built (1, 2, 3 & 4 bedroom properties).
As a first time buyer who would be buying alone I was thinking of perhaps going down this route to make it more affordable and then increase my stake as the years go by.
There are already 1 bedroom properties for sale around me however most need new kitchens/bathrooms/roofs and aren't in the best of areas hence looking at this option.
I should say i'm in Scotland and there would be no rent payable on the share the government owns plus as far as I understand it would also be a share of a freehold and not a leasehold?
I'm not aware of your local scheme. But shared equity means that you (well really your lender) own a bIt and the scheme provider (usually government but can be local authority or developer) owns a bit. You get a mortgage on the bit you own and then the bit you don't own acts as a loan and usually you don't have to repay that until 3-5 years after completion of the initial purchase.
That sounds ideal until the repayments on the bit you don't own kick in and then you have a mortgage and the shared equity loan to repay. Depending on where you live house price appreciation may enable you to remortgage your way out of the equity loan in one fell swoop. But you're in Scotland, so probably not.
This is different to shared ownership. That's where you'd pay rent on the bit you don't own.
That sounds ideal until the repayments on the bit you don't own kick in and then you have a mortgage and the shared equity loan to repay. Depending on where you live house price appreciation may enable you to remortgage your way out of the equity loan in one fell swoop. But you're in Scotland, so probably not.
This is different to shared ownership. That's where you'd pay rent on the bit you don't own.
Burgmeister said:
I'm not aware of your local scheme. But shared equity means that you (well really your lender) own a bIt and the scheme provider (usually government but can be local authority or developer) owns a bit. You get a mortgage on the bit you own and then the bit you don't own acts as a loan and usually you don't have to repay that until 3-5 years after completion of the initial purchase.
That sounds ideal until the repayments on the bit you don't own kick in and then you have a mortgage and the shared equity loan to repay. Depending on where you live house price appreciation may enable you to remortgage your way out of the equity loan in one fell swoop. But you're in Scotland, so probably not.
This is different to shared ownership. That's where you'd pay rent on the bit you don't own.
In the scheme i'm looking at you can remain as you are eg you can pay 60% and the government owns the other 40% which you don't pay any rent on and the property remains in your name. You can then either increase your share over time (min 5% increments) until you own it 100% or stay as is which would mean if you sold it you would get 60% and the gov 40% etc.That sounds ideal until the repayments on the bit you don't own kick in and then you have a mortgage and the shared equity loan to repay. Depending on where you live house price appreciation may enable you to remortgage your way out of the equity loan in one fell swoop. But you're in Scotland, so probably not.
This is different to shared ownership. That's where you'd pay rent on the bit you don't own.
What you're describing is Shared Ownership. You own a bit and then pay rent to someone else on the bit you don't own. As you say this can be done in perpetuity or you can increase your share of ownership over time - called staircasing.
Be mindful that while the scheme will let you staircase in small increments your lender may require larger chunks. Something to look at before landing on a mortgage provider.
Be mindful that while the scheme will let you staircase in small increments your lender may require larger chunks. Something to look at before landing on a mortgage provider.
From what I understand of these schemes the catch is that the part you don't own is increasing in value alongside the bit that you do own because it's based on a percentage equity share, not the purchase price.
So while you may buy the property for £100,000 and own £40k of this, in a few years time when your share is now £50k, the other share is £75k and unless you're making serious plans to save up for the second half, you're always going to be chasing your tail.
So while you may buy the property for £100,000 and own £40k of this, in a few years time when your share is now £50k, the other share is £75k and unless you're making serious plans to save up for the second half, you're always going to be chasing your tail.
romeogolf said:
From what I understand of these schemes the catch is that the part you don't own is increasing in value alongside the bit that you do own because it's based on a percentage equity share, not the purchase price.
So while you may buy the property for £100,000 and own £40k of this, in a few years time when your share is now £50k, the other share is £75k and unless you're making serious plans to save up for the second half, you're always going to be chasing your tail.
True, ideally i'd try and buy the biggest share I could initially or just buy the whole thing outright once I knew what the prices were going to be and it was affordable.So while you may buy the property for £100,000 and own £40k of this, in a few years time when your share is now £50k, the other share is £75k and unless you're making serious plans to save up for the second half, you're always going to be chasing your tail.
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