I saw an advert from a Housing Association advertising an open day next weekend regarding some shared ownership properties built in Norwich. They have knocked down a lot of old defective council houses and these homes (and rented only housing) have been built in their place.
The shared ownership homes are being sold with a 50% share. The properties are 2 bedroomed flats and 2,3,4 bedroomed houses.
I find the prices for the 50 % share somewhat steep, especially for the smaller properties. £64,500 is the starting price. I am assuming this is for a flat (and maybe a bit more for a 2 bedroomed house). So in relative terms, this Housing Association believes that their flats are worth £129,000 each! And these flats are build on a council estate. In Norwich, less than £129K buys a well presented 2/3 bedroomed flat close to town in a private residential area!
Any views greatly appreciated.
I am tired, I am weary. I could sleep for a thousand years.
Yes, a good point. The old style of shared ownership - especially in the private sector, with staircasing share options, was a good deal. However, these do sound a bit expensive. Apart from the expense though, the more concerning things to look out for are the conditions that may be tied up with this new share ownership scheme.
For example, it may be that you have to re-sell to the Housing Assoc., when you want to move thereby limiting your options for profit. You should also check the ownership rights because on many of these new units you pay for the costs of the house to be built but you don't own the land on which it stands - another drawback.
Shared ownership is a stagnant thing and I know of many people that never got beyond their 25 or 50% share and many years later still own a quarter or half a house! So as a step on to the housing market I'm not convinced it works because you are not allowed to make the profits that you can in the private sector therefore you always remain within limitations.
Another point to consider is that you have to remain in some of these properties for [mostly] 5 years after purchase before you can claim any discount or move again - so you're tied again. Better make sure you like where you choose and won't need to move again for that length of time.
If you can at all, go for the private market. if you can't, I guess S/O is one of the few options available in place of nothing else. However, when you put together the 50% mortgage payment and the 50% rent payment for the other half, I can't see where the saving is against a regular mortgage without all the stipulations!
I forgot to say.....you will probably have to pay the buildings insurance on 100% of the property, plus regular Council Tax, plus life assurance and cover, [maybe an ISA if not repayment mortgage], for your 50% of the mortgage. Sounds like a good deal to me.......for the housing association anyway!!
MattW I'm in Norwich too, and started out on the housing ladder with a Cotman shared ownership many years ago.
Found the HA were charging what they wanted for the property, and would not budge, so when mort co did a value, it was less, but the HA would not budge. Take it or leave it, plenty more people to buy etc. So we found the cash and took it.
As has been said, shared ownership doesn't mean all costs are shared. Still got to pay normal council tax, insurance, a lot of the repairs to the property, and the HA can call the shots on what you can/can't do with the property. I had to ask for permission for a sat dish, a garden shed had to be placed in the garden at a specific position etc
I suppose it is a good idea for salary multiples-a mort co may not lend you the money to buy a whole house, but you can afford the monthly repayments or mort and rent then away you go.
Give me a shout if I can answer any specific questions-although I did this a good 12 years ago now!
I always thought that shared ownership was quite a good idea, and looked into it myself before we bought our flat. My sis-in-law bought 75% of her property with the council owning the other 25%.. it wasn't a house built specifically for S/O, but a house on the open market.
The HA paid for 25% of the agreed price of the house.. but now they have come to sell she has had to pay for a seperate valuation by the HA and then regardless of the sale price, she has to give the HA 25% of that valuation - despite the fact that the HA have to agree on the sale price.
I think that she has been quite lucky, and the HA valuation was only a couple of thousand above the agreed sale price - but it doesn't seem quite right .. afterall as we often say on here, a house is only worth what someone will pay for it.
Bec
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I love the male body; it's better designed than the male mind. - Andrea Newman
Originally posted by BecciLane: I always thought that shared ownership was quite a good idea, and looked into it myself before we bought our flat. My sis-in-law bought 75% of her property with the council owning the other 25%.. it wasn't a house built specifically for S/O, but a house on the open market.
I looked into this myself too - it is called "Homebuy" but I never heard much back from the Housing Association...other than their allocation of funds had been spent on other applicants for the year.
I am tired, I am weary. I could sleep for a thousand years.
I don't really see what's so attractive about it, or am I missing something? How much does renting the other half of it cost? Is it that much cheaper than a full mortgage?
These shared ownership things just inflate the market even more by the looks of it.
A lot of people can normally afford the repayments on a full mortgage (especially if you've been renting already).. but the problem is that they are unable to get a mortgage to the full value of the property - which is where the appeal is.
The rent is calculated depending on what the value of the property is, and how big the share is that you own - and it's different for different builds.
The S/O that my s-i-l has means that she doesn't pay rent on the 25% of the house that the council owns - they make their money through a rising market.. and even if the market value drops, then they have to pay what the council paid (ie - they pay either 255 of the value when it was bought, or 25% of the value when they sell, whichever is highest).
My brother owns 25% of a S/O in London.. which is the only way they would have ever been able to buy there. I think that there small 2 bed flat was worth about £250k 3 years ago.. but I am afraid to say I don't know how much rent they pay.
B
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I love the male body; it's better designed than the male mind. - Andrea Newman
And these flats are build on a council estate. In Norwich, less than £129K buys a well presented 2/3 bedroomed flat close to town in a private residential area!
