Then BTL landlords will own masses of property and THEY can determine house prices.
Fingers crossed hey
Shared ownership or try and buy outright?
- Thread starter churchhawk
- Start date
Then BTL landlords will own masses of property and THEY can determine house prices.
Fingers crossed hey
Alas people say this all the time, but it never does - even a nasty recession wasn't enough to crash it. London is becoming a playground for the rich and has passed the point of no return.
House prices aren't going to come down, in the south east anyway. Supply and demand.
I agree it's crazy though. I recently saw an estate near Wokingham advertising 3-bed starter homes. They are £500k. Yeah, something is kind of wrong when a 3-bed terrace is half a million pounds and gets described as a starter home.
I agree it's crazy though. I recently saw an estate near Wokingham advertising 3-bed starter homes. They are £500k. Yeah, something is kind of wrong when a 3-bed terrace is half a million pounds and gets described as a starter home.
London prices have gone a bit mental, mine's nearly doubled in value. 2 bed flat and could sell and buy decent sized house out of town and be almost mortgage free. Hope it doesn't implode any time soon but instead calms down a bit.
I did get ridiculously lucky though, bought late 08 after the crash from developer desperate to flog the last dozen units of a new build. Old man also convinced me to get tracker mortgage which after a few months saved me a grand a month (interest)!
Would never have been able to afford on my own otherwise.
£300-350k is now on the low side in London for a 1 bed. Could get a nice house for that in the rest of the country.
I did get ridiculously lucky though, bought late 08 after the crash from developer desperate to flog the last dozen units of a new build. Old man also convinced me to get tracker mortgage which after a few months saved me a grand a month (interest)!
Would never have been able to afford on my own otherwise.
£300-350k is now on the low side in London for a 1 bed. Could get a nice house for that in the rest of the country.
That's ridiculous, what's even more ridiculous is that while wages are higher in the locations with higher house prices, they aren't that much higher.
I bought my house (Birmingham) a couple of years ago for £120k, it would be worth more like £3-400k in Bath where I moved from, however I certainly wouldn't be getting paid 3x my current salary to do the same job down there!
As above house prices in London are not going to come down. You will get fluctuations in the price where there are slight drops or maybe a year or two where they do not rise but ultimately they will keep going up. The amount of foreign buyers and the lack of land available make it pretty much a sure thing.
If staying in an area where you cannot get onto the housing market another way then shared ownership isn't a terrible option at all.
I have a flat in an area of London where I could not have hoped to get onto the property market in. Due to wanting to stay in the area I instead chose a 30% share of the flat. I can increase it up to 100% if needed but haven't done so.
With most of these scheme's the rent is controlled so cannot be increased above a certain amount. I think mine has gone up by about 0.5% each year where as some years not at all. When I was renting it was far more than this.
This was 5 years ago and I've just had it independantly valued and sure I only get 30% of the increased value but I'm not in a position where I can sell my share on and use the money to buy a place outright all the while living exactly where I wanted to in a flat which I could have not afforded to rent.
To give some figures the flat's value was £295,000 during the initial purchase. The recent valuation puts it at £375,000.
So I've made £24,000 and of course 5 years of mortgage payments which means if I get out now I have about £45,000 - £50,000 for a deposit.
The monthly payment for mortgage and rent combined is £1050 but if I was just renting in a similar properly it would be at least £1650. That's more money saved I could be saving towards a deposit but living in London it goes on other things
Obviously if you can afford it go for having a full mortgage but if not then shared ownership is in my view a good way to get that foot on the ladder.
If staying in an area where you cannot get onto the housing market another way then shared ownership isn't a terrible option at all.
I have a flat in an area of London where I could not have hoped to get onto the property market in. Due to wanting to stay in the area I instead chose a 30% share of the flat. I can increase it up to 100% if needed but haven't done so.
With most of these scheme's the rent is controlled so cannot be increased above a certain amount. I think mine has gone up by about 0.5% each year where as some years not at all. When I was renting it was far more than this.
This was 5 years ago and I've just had it independantly valued and sure I only get 30% of the increased value but I'm not in a position where I can sell my share on and use the money to buy a place outright all the while living exactly where I wanted to in a flat which I could have not afforded to rent.
To give some figures the flat's value was £295,000 during the initial purchase. The recent valuation puts it at £375,000.
So I've made £24,000 and of course 5 years of mortgage payments which means if I get out now I have about £45,000 - £50,000 for a deposit.
The monthly payment for mortgage and rent combined is £1050 but if I was just renting in a similar properly it would be at least £1650. That's more money saved I could be saving towards a deposit but living in London it goes on other things
Obviously if you can afford it go for having a full mortgage but if not then shared ownership is in my view a good way to get that foot on the ladder.
Supply and demand goes the other way though. Walk around Wandsworth for example.. they're building endless apartments that are being snapped up by foreign buyers. There's just thousands of them.
http://www.thisismoney.co.uk/money/...s-snap-70-new-build-homes-central-London.html
If the market for investors starts to waver they will sell. If they do that en masse then it *could* happen. Especially if some form of rent control and anti-BTL legislation comes in. If BTL is not an attractive investment in London then people will sell up and cash in. Meaning yet more supply.
I'm sure that's what people in Ireland were saying..
NB: Yes I know this is far-fetched but it could happen. Bearing in mind 2-bed flats on my street go for 500k+ then it's all I've got to hope for really..
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Just to chip in on this... We have a shared ownership house (50%) and it is certainly not a scam, probably the best thing we have ever done but it depends on circumstances.
Our house is worth approx. £200k and we have a mortgage on 50% of it and pay rent for the 50% we don't own. Our current LTV is around 75% and equates to around £300 / month mortgage-wise. The rent on the rest is approx. £250 / month. So our total outlay for the house is £550 / month. (our rent went up £20 last year, but then again our house value rose 10%).
My wife is currently at Uni, I am not massively well paid and we have two children, there is no way we would get a mortgage to buy outright. If we did buy outright the mortgage would be around £800 give or take and renting which is the only other option would be about £900 for a similar house.
I don't know anyone else who has a 3 bed house in Cambridgeshire for £550 / month? How it is a scam I've not yet figured out - It is cheaper than renting and cheaper than a full mortgage, if I really wanted to the extra money I saved could always go towards overpaying anyway. A lot of people confuse shared ownership with other schemes such as Help to Buy (which arguable will cause problems down the line). Most people have a lot of misconceptions and talk drivel...
The "owner" is a non-profitmaking organisation - A housing society and rent is normally capped at around 2.75% of the value of the remaining share of the house. That is LOWER than mortgage interest rates (generally) so you are in effect saving money.
Some truth in this but mainly confused with Help to Buy which is a totally different scheme. The part of the house you buy in shared ownership is leasehold and the lease normally starts at around 100-125 years. Any time within that 100-125 years you are free to sell or buy out the other part via mortgage. It's such a long time I can't see it being an issue.
It is pretty much deemed your house, you are free to redecorate, rip down walls, add conservatories, whatever you want! The only issue really is that whatever you do will affect the value of the house and if you raise the value and then want to buy out the housing society you will in effect be paying twice for any improvements. Again, no landlord as such and rents are capped at a low rate. I am assuming people are aware that the interest payments on mortgages go to line the banks coffers!? With the money saved by renting the other share of the house, you can overpay your mortgage and increase equity that way, with the flexibility to be able to stop or reduce overpayment if circumstances change. This gives far more financial security and flexibility than being liable for 100% by buying outright. You are responsible for maintenance etc and having to sell just like owning any other house.
I can only speak for my experience and rent rates do vary between housing societies and locations so you can get good and bad deals. But the plus sides far outweigh the negatives depending on your situation; it is a foot on the ladder, it is cheaper than renting and buying outright, buying only a share of a house (eg. 50%) seriously boosts your LTV and therefore lowers the interest rate and it is really a stepping-stone on the way to full ownership. Also worth noting that if you can find a shared ownership house with 75% available to buy, then you don't have to pay any rent at all.
Do your own research and don't listen to the ill-informed.
Our house is worth approx. £200k and we have a mortgage on 50% of it and pay rent for the 50% we don't own. Our current LTV is around 75% and equates to around £300 / month mortgage-wise. The rent on the rest is approx. £250 / month. So our total outlay for the house is £550 / month. (our rent went up £20 last year, but then again our house value rose 10%).
My wife is currently at Uni, I am not massively well paid and we have two children, there is no way we would get a mortgage to buy outright. If we did buy outright the mortgage would be around £800 give or take and renting which is the only other option would be about £900 for a similar house.
I don't know anyone else who has a 3 bed house in Cambridgeshire for £550 / month? How it is a scam I've not yet figured out - It is cheaper than renting and cheaper than a full mortgage, if I really wanted to the extra money I saved could always go towards overpaying anyway. A lot of people confuse shared ownership with other schemes such as Help to Buy (which arguable will cause problems down the line). Most people have a lot of misconceptions and talk drivel...
The "owner" is a non-profitmaking organisation - A housing society and rent is normally capped at around 2.75% of the value of the remaining share of the house. That is LOWER than mortgage interest rates (generally) so you are in effect saving money.
Some truth in this but mainly confused with Help to Buy which is a totally different scheme. The part of the house you buy in shared ownership is leasehold and the lease normally starts at around 100-125 years. Any time within that 100-125 years you are free to sell or buy out the other part via mortgage. It's such a long time I can't see it being an issue.
It is pretty much deemed your house, you are free to redecorate, rip down walls, add conservatories, whatever you want! The only issue really is that whatever you do will affect the value of the house and if you raise the value and then want to buy out the housing society you will in effect be paying twice for any improvements. Again, no landlord as such and rents are capped at a low rate. I am assuming people are aware that the interest payments on mortgages go to line the banks coffers!? With the money saved by renting the other share of the house, you can overpay your mortgage and increase equity that way, with the flexibility to be able to stop or reduce overpayment if circumstances change. This gives far more financial security and flexibility than being liable for 100% by buying outright. You are responsible for maintenance etc and having to sell just like owning any other house.
I can only speak for my experience and rent rates do vary between housing societies and locations so you can get good and bad deals. But the plus sides far outweigh the negatives depending on your situation; it is a foot on the ladder, it is cheaper than renting and buying outright, buying only a share of a house (eg. 50%) seriously boosts your LTV and therefore lowers the interest rate and it is really a stepping-stone on the way to full ownership. Also worth noting that if you can find a shared ownership house with 75% available to buy, then you don't have to pay any rent at all.
Do your own research and don't listen to the ill-informed.