Mortgages, help to buy, shared ownership
- Thread starter Lmg80
- Start date
Soldato
Where abouts do you live?
How many people will live in it?
How many people will live in it?
So take this example, rent would be £433.85 (30%) value, do I therefore need to source a 70% via a mortgage, so need a £208,250 mortgage or £89,250? Sorry if I'm being thick
Full Price £297,500
Share Example
30% share - £89,250
Monthly Rent
£433.85
Monthly Service Charge
£30.00
https://www.helptobuyagent3.org.uk/find-a-home/property-details?id=54494&bedrooms=3&IDType=2
Full Price £297,500
Share Example
30% share - £89,250
Monthly Rent
£433.85
Monthly Service Charge
£30.00
https://www.helptobuyagent3.org.uk/find-a-home/property-details?id=54494&bedrooms=3&IDType=2
You'll have a 30% share in the property, pay £463.85/month rent and service charge and pay a capital sum of £89,250 via your deposit and mortgage.
Thank you
Caporegime
I'd go see a mortgage advisor first and say what you want explaining 
I'd personally do help to buy over a full on shared ownership
I'd personally do help to buy over a full on shared ownership
Soldato
Presumably this is a new build. If so, they'll have people help you understand all this stuff. If I could recommend a mortgage broker to you, I've had a very positive experience with The Mortgage Bureau (https://www.mortgagebureau.net/).
Associate
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- 7 Mar 2015
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IIRC shared ownership comes with its caveats. Ex, you need to ask council if you want to make changes to your flat + rules on who you can sell it on to if you wish...
Also yeah , speak to a mortgage broker as they will walk you through everything.
Also yeah , speak to a mortgage broker as they will walk you through everything.
L&C were pretty good for me and free.
To be fair I picked the exact deal they did. But it did help as its just one less stress to deal with.
And mine was a normal purchase.
But yes.
You'll pay rent on the part you don't own.
That bit you don't own can grow and shrink as prices change.
I also think there are caveats to what you can do to the house.
I'd avoid it if at all possible. But not the end of the world if you can't.
To be fair I picked the exact deal they did. But it did help as its just one less stress to deal with.
And mine was a normal purchase.
But yes.
You'll pay rent on the part you don't own.
That bit you don't own can grow and shrink as prices change.
I also think there are caveats to what you can do to the house.
I'd avoid it if at all possible. But not the end of the world if you can't.
Thank you all, been very helpful.
Right now, I'm chucking £1k a month in the private rental market. I did have a house I sold (break up) but had little to no capital unfortunately 10 years ago.
I think the only way back onto the property ladder (affordable) is via shared ownership unfortunately as saving nigh on £20k+ is impossible and being 41 y.o getting on!
I think as suggested a mortgage advisor discussing my circumstances is the way forward for now.
Right now, I'm chucking £1k a month in the private rental market. I did have a house I sold (break up) but had little to no capital unfortunately 10 years ago.
I think the only way back onto the property ladder (affordable) is via shared ownership unfortunately as saving nigh on £20k+ is impossible and being 41 y.o getting on!
I think as suggested a mortgage advisor discussing my circumstances is the way forward for now.
If viable I'd agree. I'd definitely compromise on house to get out of it.
Like dropping a garage for example to get under the bar.
But might not be possible for OP
Associate
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- 1 Dec 2017
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- 293
I'd agree with this too. If you live in an area where you could actually buy fully without going too deep into the wrong part of town then do that. I can see the appeal of a big house but it's not even yours to do with as you please. May as well rent at that point IMO.
Caporegime
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- 21 Jun 2006
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- 38,372
Buy a flat at your age having 30% of a house with retirement on the horizon in a couple of decades you are going to end up in a sticky situation
Associate
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- 2 Jul 2019
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Personally, (i'm with the others), shared ownership is just cringe worthy. I am of the opinion shared ownership may as well be considered a scam. I might be wrong in thinking, but there's no certainty or at minimum no safe reliability in you will get an adequate return on your investment in a shared place. Issues that may or may not exist could be availability to buy rest of the property, when you can buy it, and for how much. Also paired with rental cost increases. I seem to recall service charge increases are capped.
There are horror stories out there surrounding leases and shared ownerships which i think are very slowly being addressed, these have again been in the news a little.
You will be wise to take note on current house prices and what will happen to you and your costs if prices do fall. I'm not saying they will fall, just like interest rates aren't expected to rise, but a person who likes reassurance and security should evaluate this. You might want to evaluate (if you haven't already), plans for retirement, if you continue working part time, and available pension. Moving house costs a surprising amount. If it were me i'd wait another year if you can get that £1k rental amount down.
Personally i'd avoid new builds regardless. Depending on your area and preferences, a flat or apartment isn't a bad call.
Not the best situation you've got, but not all doom and gloom by any means, just depends what you want.
There are horror stories out there surrounding leases and shared ownerships which i think are very slowly being addressed, these have again been in the news a little.
You will be wise to take note on current house prices and what will happen to you and your costs if prices do fall. I'm not saying they will fall, just like interest rates aren't expected to rise, but a person who likes reassurance and security should evaluate this. You might want to evaluate (if you haven't already), plans for retirement, if you continue working part time, and available pension. Moving house costs a surprising amount. If it were me i'd wait another year if you can get that £1k rental amount down.
Personally i'd avoid new builds regardless. Depending on your area and preferences, a flat or apartment isn't a bad call.
Not the best situation you've got, but not all doom and gloom by any means, just depends what you want.
I owned a part ownership property for 10 years before selling my share and moving to a bigger “standard” property.
As long as you understand the requirements and limitations of it then it is fine. It is a cheaper way onto the market and will provide you more return on your money than renting.
We purchased ours at 30% of full value which was £125k in 2009. Our share was £37.5k. We provided £7.5k in deposit and mortgaged £30k. Rent on the 70% started at £300 and rose steadily over the 10 years. Buying that house was cheaper overall even after fees than renting the equivalent.
When we sold it we sold our share to a new shared ownership tenant. Full value was £175k. Our share valued at £52.5k. Equity was around £26k. This let us put deposit on new house and move. There are fees to sell it amounting to around £1k to £2k on top of normal selling fees and yes we didn’t get the full rise in equity but at least we got something rather than renting.
We made loads of changes to the house during the 10 years and never had a problem asking permission same as we would have had to when renting.
Make sure you understand the contracts and requirements and the freehold/leasehold parts of it. As shared ownership you will be bound by leasehold but the other owner should have the freehold.
If you wish to buy the rest then you should be able to. Our neighbour who was in the same scheme as us did this when we sold. Again there are additional fees to do it but he bought the other 70% and now owns the freehold on his property like any other. Other than a covenant that if he sells he has to offer to sell back to them first at full market rate before open market for 21 years there is no restriction on him.
There are horror stories but understand it and it’s fine. I personally felt that 30% of a property is better than 0% by renting if you can’t afford to buy a full market property.
As long as you understand the requirements and limitations of it then it is fine. It is a cheaper way onto the market and will provide you more return on your money than renting.
We purchased ours at 30% of full value which was £125k in 2009. Our share was £37.5k. We provided £7.5k in deposit and mortgaged £30k. Rent on the 70% started at £300 and rose steadily over the 10 years. Buying that house was cheaper overall even after fees than renting the equivalent.
When we sold it we sold our share to a new shared ownership tenant. Full value was £175k. Our share valued at £52.5k. Equity was around £26k. This let us put deposit on new house and move. There are fees to sell it amounting to around £1k to £2k on top of normal selling fees and yes we didn’t get the full rise in equity but at least we got something rather than renting.
We made loads of changes to the house during the 10 years and never had a problem asking permission same as we would have had to when renting.
Make sure you understand the contracts and requirements and the freehold/leasehold parts of it. As shared ownership you will be bound by leasehold but the other owner should have the freehold.
If you wish to buy the rest then you should be able to. Our neighbour who was in the same scheme as us did this when we sold. Again there are additional fees to do it but he bought the other 70% and now owns the freehold on his property like any other. Other than a covenant that if he sells he has to offer to sell back to them first at full market rate before open market for 21 years there is no restriction on him.
There are horror stories but understand it and it’s fine. I personally felt that 30% of a property is better than 0% by renting if you can’t afford to buy a full market property.
Associate
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- 1 Dec 2017
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I can appreciate your view but I would say is that some people are entirely blinded by their expectations. 30% of a 4 bed detached might be better than 0% of it ... but what about the two bed semi a few streets away that you could afford in full?
Obviously not a perfect example but I've found house hunting to be extremely humbling to the point of considering shared ownership. I imagine those with a greater sense of entitlement could easily fall into a trap.