Hello,

Looking to buy a 1/2 bed in that there London, somewhere reasonably close to central. First time buyers.

As typical with almost everyone else in the world, buying a flat the ‘normal’ way in London is far out of reach. But with a shared owensership mortgage we could afford quite a few new builds.

For those who aren’t sure what shared ownership is:

Shared Ownership

If you can’t quite afford the mortgage on 100% of a home, Help to Buy: Shared Ownership offers you the chance to buy a share of your home (between 25% and 75% of the home’s value) and pay rent on the remaining share. Later on, you could buy bigger shares when you can afford to.

We fit the criteria and are going to start going to advisors hopefully next week. In the mean time, I’m wondering if anyone here has any experience or advice (either for shared ownership or first time buying as a whole)

Thanks!

AVOID AVOID AVOID

AVOID AVOID AVOID

Why

AVOID AVOID AVOID

Why? My niece is thinking about this.

Yeah, you really can’t just spam avoid without offering why!!

Mrs NOTG and I are both saving what we can for a deposit on our first place, which will almost certainly be shared ownership.

The biggest thing that concerns me at the mo is what happens if we retire, still not owning the property outright, with very little savings in the bank to cover the rent on the unowned share for very long?
Will Housing Benefit cover the shortfall until we are both pushing up the daisies?
Or would be forced to put property on market straight after retiring, go back to renting and use the money we get back from the sale?

Shared ownership houses I’ve looked at for my son’s seem somewhat overpriced when you look at the figures

tread carefully .

be sure you understand the contract and what the rent portion increases by on the shared owner ship.

check what the costs are if you were to want to buy them out – if thats even possible it isnt always.

check what you can and cant do to the house.

to me its only slightly better than renting as you have the security of having your own capital tied into it but they still have a command over what you can and cant do

How ever i should add that with tthe right contract and a management co that aint out to **** you over then they do have a valid place in society to give the security that short term rentals do not give but there are many unscrupulous sneaking in that rent may increase by X% every X years …. now double every 10 years might not seem bad but remember property goes down as well as up – you could end up tied into a contract where the rental portion of your contract costs more than renting a whole equivalent local flat….- which is where the ability to buy out becomes important.

top tip – get your own trusted/recomended solicitor to look over hte contract and do due dilligence , dont use the “fee free” one supplied by the vendor…..

I personally would not buy at current london levels, landlord reforms will start impacting soon and if they dont, more reforms to come.

A lot of the london ftb stock has gone to landlords in the past so i d say its the segment most prone to a downturn. Lots of headwinds, interest rate cycle, landlord tax reforms, 3% stamp duty surplus on second purchases.

Saying the above, the only thing that would get me to sell up and free up more stock for ftb would be a cgt holiday, but thats not going to happen.

I d avoid the shared purchase on an inflated purchase price, keeep trying lower offers on ex btl stock, you will get lucky.

friends of mine managed to sell theirs as the rent portion went up and up way over inflation from £200 to £600 in a few years. also when you sell the buyers have to be approved by the housing association. also don’t forget that if there is a correction of prices you suck up any equity loss not the association if you decide to sell.
i see it as the last resort, i would really look at trying to buy outright a bit further out if you can.
they are also always overvalued.

At least 2 people i know were effectivly trapped in the ownership when it came to sell.

The company who owned the other part of the property had a minimum figure they would accept. The first of these was post ’08.

The second was just the company holding out for a very high offer (over market value); in the end she accepted the offer and paid the company the difference; meaning that for her 50% she took 40% of the sale price (or thereabouts).

With those type of horror stories + brexit uncertanty looming i’d be very wary.

Another friend of mine made a metric shit ton of cash, buying post 08, selling recently near Brixton market.

I bought a house on the shared basis. I wouldn’t do it again. The reason is that the rent goes up every year. Every year! When I bought the house the rent was £225 for the 50% share. 6 years later it had gone up to just over £400.

The main reason though is that when you come to sell you may be responsible for all the costs. Both yours and the HA. When I sold mine they wanted me to pay for everything yet still wanted half the sale price. Luckily for me I managed to wriggle out of it because they had not got me to sign anything. They kept insisting on it referring to their terms and conditions. I kept asking for a signed copy which they could not produce. eventually and it took a letter from a lawyer to resolve. Their costs were just over £4000.

plyphon – Member
Yeah, you really can’t just spam avoid without offering why!!

Well I can, and did. 😆

Okay, okay. Some/all of these issues may have been specific to my provider.

1. The flats are overpriced to start with as more people can afford them

2. The mortgages you can choose are limited as some providers won’t cover shared ownership

3. The providers waste significant amounts of time during the buy process, approving the purchasers etc.

4. Read the documentation very very carefully, and there is a metric shit tonne of it. Talking a 3 inches thick wadge of paper. Read every sheet.

4.1 We were on the hook for ‘fire remedial works’ even though it was them who had got it wrong. Our fault for not reading the docs thoroughly enough but annoying nonetheless

4.2 The shared rent increased above inflation every year due to some clause or other we hadn’t understood. Again, our fault but ***tish for ‘affordable housing’

4.3 The management company (also owned by the provider) increased their fees drastically over the 3 or 4 years we lived there. Tripled I think. I can’t remember if it’s possible to sack them or not.

4.4 The road was unadopted and we were therefore on the hook for the maintenance of the substandard work they’d done. And of course it needed significant stuff done every year to keep their employees nice and busy.

4.5 We were responsible for all maintenance inside the flat. Even stuff arising from their **** ups during the build.

5. When you want to sell, it is compulsory to offer it for 6 weeks via their own ‘for sale’ website delaying your sale by 6 weeks (as no **** looks at their website and it doesn’t go on rightmove)

6. They have veto over your buyers for various reasons.

7. They have veto over your sale price. It is no skin off their back to keep your trapped there, because you still have to pay them rent.

8. They delay your sale with their paperwork. Ours took a year. No **** joke, a year!!

And some general ‘new build flat’ points…

1. Not enough parking, by far. I had 1 allocated space. Often it was stolen because there was so little parking. I estimate less than half of what was needed. Not only could I not park in my own space, often not anywhere on the estate. A good 10 minutes walk away sometimes. You want guests over? Forget it.

2. Social tenants. Right, I’m a fully paid up grauniad reading lentil muncher, however, the social tenants in my particular block were total unmitigated ****.
It hurts me to say that because goes against my own beliefs but they just were.

I hope that doesn’t offend people but it’s my true feeling. I would avoid flats with social housing mixed in at all costs.

Tl;dr

AVOID AVOID AVOID

Luckily for me I managed to wriggle out of it

Ling…
Ling…
Ling…

*waits patiently

It’s all good advice. Thanks for posting everyone.

Don’t all new builds have to have social housing these days?

Social housing can be offset to another location, new builds in sw london are top money, zone 6 500k for a 2 bed, v 400k for a normal 2 bedder. The locations are a bit grim too dont fall for the shiny sales offices.

Good houses sell quickly, i saw a 3 bed house, bit tired but all 80s original, come on the market last saturday at 50k more than last year, same road, sold immediately.

When i was a ftb in the late 80s, best advice i got was wait, buy something you really want for 10 years and can grow into. Maybe sacrifice location for a nicer house a bit further out.

We did it maninly because we got a nicer house for th same money as the skanky houses we could afford at the time.

Our rent portion has increased but only by about £50 over 10 years. We should have bought more but we were lazy and left it as is.

We’re just about to sell and move and they’re being really hands off – selling price set by the agent etc. Our house is probably an anomaly though because it’s old.

Friends of our have just bought out the ‘shared’ chunk of their shared ownership home after buying part of it several years back. Whole thing has been very straight forward, no issues at all.

It seems it’s quite polarising, some people reporting every nightmare in the book and others saying it worked flawlessly.

It might be our only choice, even if we moved really far out any reasonable dwelling with connections to Central are £400K.

How far out are you looking? In kingston a nice 1 bed is c 350k now, whereas a 3 bed house in shepperton is 450. The 1 bed is c 40m2, a couple would be really squashed. The 3 bed house has a 30 foot lounge diner and 50 ft garden, but is double the distance from central london.

I think post budget and stamp duty relief the ftb prices will be marked up. The agents are so competitive, there must be 12 agents clustered around kingston station.

Don’t all new builds have to have social housing these days?

Technically yes and proposals always include it / affordable but then, once planning is approved, they resubmit planning and get it removed.

So be vary aware of these, as we are dealing with my mums estate it is turning out that “shared ownership” means your basically in a rented place but the useless landlord now has a deposit in 10’s of thousands and not a few hundred quid.

I have to say apart from the increased rent our HA was very hands off and it worked flawlessly. It was only when we came to sell that it got to be an issue.

Even then we were able to sell on the open market after the initial 6 week period we had to have it with them. as said before. they were very slow on paperwork but i probably didn’t help my cause by refusing to pay their demands.

How far out are you looking?

Not as far our as Kingston – ideally somewhere on the Northerline… Highgate would be lovely…!

I appreciate that’s not really “far out” – but I live in Angel currently so it’s all relative

but I live in Angel currently so it’s all relative

just accept you will not be buying in islington and look elsewhere.
me personally i would take a slightly longer commute and somewhere not in one of the most expensive postcode’s over a shared ownership scheme, or somewhere smaller but in a desirable street and trade up as and when you can.

Oh I’ve already accepted that!

There is a delicate balance between affordability, connections/commute and quality of living.

We need to see an advisor to see how much we can truly afford on a regular ol’ mortgage, or looking at one of the other help to buy schemes.

Or another plan I’m hatching – there are a few flats i’ve seen that are *just* out of affordability, which means the rent on shared ownership is quite low and we could realistically go for 100% ownership when salaries increase in the next few years.

In my mind people see to get caught out when they buy seriously expensive properties on Shared Ownership thinking it’s a ticket to a 800k flat, and then get caught out on rents. But if it’s a “reasonable”450/500k flat rents should be manageable and also more realistic to staircase…

I’ve not written it off yet, but i’m treading carefully.

I bought my first house through a housing association on shared ownership. OK I paid a bit in rent which was “lost” but it got me a nice home.

I’m not saying all end in horror stories in just saying go in with eyes open , don’t assume the onsite bundled solicitor to be impartial and be sure what your signing up to.

My daughter did it 10 years ago, nightmare, paid over the odds in first place, it was new build, quality was terrible, issues resolving bad build as she was second owner, first was housing association, who owned half, but did nothing to resolve problems, during ownership it was a nightmare and when it came to selling it was all stacked up against her BTW it was in Horsham a property hot spot, yet the value in the property went barely up because of the inflated price she paid in first place.
Only winner was the Housing Association to me they are just professional crooks taking advantage of those less fortunate

Not much to add. The best advice you’ve had is to go into it completely eyes open.

The particular areas to pay attention to are any rent increases and the T&C’s around selling the property. As has been mentioned some contracts make it almost impossible to sell the property as the other party has so many vetoes.

I’d get a knowledgeable solicitor, independent to the conveyancing process, to look through the whole thing. So cost you a couple of hundred but money well spent.

Son looking at a house with Scottish gov http://www.gov.scot/Topics/Built-Environment/Housing/BuyingSelling/help-to-buy

Is this the same as comments above?

There are private rent to buy schemes and Housing association rent to buy schemes the later is the better, as theyre not out to make on a profit on add on costs, also all flats have a service charge on top of the mortgage and rental, you may also be tied into their insurance scheme, repairs to the block and when annd if you decide to sell you have to let them offer you a price not usually what you value the place at.

I bought my first house this way, initially owning 50% and increasing the percentage to 75 and then 100% over 5 years.
Thames valley housing association owned the other portion. We had no issues at all with them despite buying the house as a near derelict shell and substantially increasing the value by improving it. I had feared they would want a cut of ‘my’ added value, but not at all.
This was 20years ago so their policies may have changed, but if they’re the same I would have no hesitation in recommending them.

Two of my kids got onto the property ladder in London through shared ownership, and we’ve had no problems. Rent rises we’re infrequent and reasonable and when they wanted to sell it was no problem. The flat was valued by independent agents and the valuations were about right, although they did have to cover the HA’s costs, but again they we’re reasonable.

As a country bumpkin I cannot fathom the lure of London v the joys of living and working somewhere cheaper?????
Is living and working in London resuscitate less money and a decent work/life balance somewhere else worth the hassle??????
Or any major city for that matter?????
What is the attraction????
I ask due to the current issues re attracting GPs/consultants to our new build hospital in what appears to be seen as a “backwater”. D&G….

What is the attraction????

I’m a country bumpkin too, the attractions? I lived in a small village with nothing to do and everyone knew your business, the pub had the same people propping up the bar drinking their lives away coming out with the same old crap. The nearest big town was an artless place where people went to have more choice on who you picked a fight with. After escaping to study art/design/photography London offered a chance to do what I wanted to do with my life which was:
Not sit in an office with a line manager, dress code, a copy of word/excel and a retirement date.
Not sit on a country pub bar-stool on Friday/Saturday/Sunday
Become a photographer and see lots of different things/places/people and get paid for it and basically do what I love.
All this in a place that offered immediate access to the things I like (art/food/culture/old stuff/odd stuff/bonkers stuff) plus more importantly other likeminded people aka media tosspots. There’s also a lot of people I dislike here like ignorant chavs, tourists and really posh self entitled idiots but you get them everywhere.

There aren’t many places that would tick all my boxes, some come close but often are way behind in something, I think the only places that come close are Barcelona where I have spent a fair bit of time and perhaps Milan.
In the U.K. Manchester is about the only other city I could possibly entertain but I know I would never actually live there (there is no point in me doing so)
I totally get why people wouldn’t want to live here but I find some of the attitudes from the provinces quite odd, nobody is asking you to live there or visit but you absolutely detest the place even though it could have been years since your last visit to the tourist hotspots and a steak at garfunkles/Berni-inn (which I hate as much as tourists seem to love).

Thing is I’m not an ignorant townie either, I probably know more about how the countryside ‘works’ than a lot of people who live there, ‘m just not ready to move back there yet.

BBC R4 ran an item last month on regional house prices, there’s a few callers describing experiences with shared ownership and inflated prices at the point of sale if you’re interested…

You and Yours – What’s happened to house prices where you live?
http://www.bbc.co.uk/programmes/b098bsv8

Trekster – Member
As a country bumpkin I cannot fathom the lure of London v the joys of living and working somewhere cheaper?????
Is living and working in London resuscitate less money and a decent work/life balance somewhere else worth the hassle??????
Or any major city for that matter?????
What is the attraction????
I ask due to the current issues re attracting GPs/consultants to our new build hospital in what appears to be seen as a “backwater”. D&G….

So for starters work/life balance has nothing to do with being in London or not. I know people who work 45 hours a week in the country (And have to drive further to get to their jobs, maybe even to another town/city) and I work 37 hours and walk 15 minutes to work each morning.

Employers in the capital tend to be more ‘forward thinking’ (excuse the business BS) to attract talent so you get nice quality of life things like flexi time, extra annual holiday, etc – i’d wager the average work/life balance is better in the city with modern employer practices vs small town employers.

I moved to London because there really are opportunities everywhere if you work in technology/software. Other areas might be struggling with employment but software/tech is roaring right now. You simply can’t get these type of jobs in some places.

When I visit these rural/suburban villages I often wonder what all these people do to earn a living. Truth is they’re either doing local work for peanuts or driving 45 minutes each way to a job in a business park.

All in IMHO of course, and just an opinion to defend the city 😉

FWIW I grew up/came from a town on the edge of the New Forest, so I’ve done my stint in small villages and towns.

Also thanks all for the further replies,

I spoke to a friend in the mortgage business (but not looking to get one through him, so impartial advice I hope) and he said they sell loads of them (different part of the country also) and they’re a lot better than they used to be – most of the issues have been ironed out over the years.

Glad to see some successes alongside the horror stories.