Shared ownership of a property?

[Krystal]

Does anyone know what this is and can explain it in Laymans terms to me if possible.

I'm really struggling at the moment to find a decent house for what we can afford now my work hours are part time. I really want my own home for Jack to be settled in.

I keep seeing houses up for sale for half the price as shared ownership.

Obviously plus point it half a mortgage lol, but is there a catch?

 

[Lola's Mummy]

I think you have to pay rent on the part you don't own ie If you own 50% than you would have to pay 50% of it's rental value as well to whoever owns the rest of the property

 

[1sttimemum]

Lolas mummy has pretty much got it spot on. You pay a % mortgage and the other % is rent, when you have repaid so much off the mortgage then you have the option to purchase more of the rental part making your original 50/50 split for example 75/25.

Hope this makes it a bit easier?

Also it should give you an idea on any banks website, there wording of shared ownership and if they deal in those types of mortgages

XX

 

[leckershell]

Add all the costs up before you take it on. We had a look at a couple, but with a £80k mortgage (half of £160k, expensive mortgage because it's a new house) and the rent on top, we would be paying more out each month than getting a £130k mortgage and owning our own house.

x

 

[Krystal]

Thanks for replying girls, wll the one I looked at would work out approx 379 mortgage and 147 rent sounds good and cheap to me.

Does anyone knows what happens if you decide to sell in a few years, I would imagine it would be difficult to sell half a house?

 

[MissSara]

No its not difficult these days to sell either my friend has just bought 70% of her house and was wondering about selling, but because more and more people are wanting to get on the property ladder they have told her that it wouldn't be a problem selling.

She also has the chance to buy all the house after the 70% is met, if that makes sense?

 

[Krystal]

Yeah the being able to buy more makes sense, the only thing that doesn't though is this.. if i was to buy 50% of the house my mortgage would be over lets say 25-35 years.. do I have to wait until I have my mortgage paid then get another one... or do they mean once lets say I go back to work full time and can get a bigger mortgage I can buy the other part.
Also when you go to buy the other 50% do you pay this curent price or do you pay more if house prices rise if that makes sense.. don't worry if you don't know answers hehe


Think I may look into it further actually, least it would be a step on the property ladder wouldn't it.

 

[Tori]

Hey, iv moved into my shared ownership house last august. I brought 70% of the house n pay rent for 30%. After iv been in the house a year i can buy the other 30%

A house up the road has just sold in 2 days for 50% shared ownership so u can see the other 1/2 or whatever pretty easily

Hope that helps. if u got ne questions feel free to ask xxx

 

[Krystal]

Cheers Tori.. so if in a year you want to buy the other 30% do you pay 30% of the current house price?

Or for example if house prices rose by 50% (yes i know they wont lol) then do you have to buy the other 30% at the house price in 1 years time. Hope that makes sense

 

[NickyB]

Someone I work with just sold a 50/50 shared flat, it was a nightmare and she was stressing all day for months over it. She was made to sell for less than it's current market value too. I know she'd tell you to avoid it if possible. It was shared with a housing association, maybe they're more difficult to work with than another individual?

 

[Krystal]

Thanks hun, it's good to know both sides of it. Thats one thing I do worry about is if I can't afford to buy the rest and need to sell just 50% thats going to make it difficult. hmmm

 

[Tori]

The housing association own the 30% of mine and when i want to buy it, i just pay the remaining 30% of what the house was worth when i moved in.

If i want to sell it at ne point then they offer it to local people who are looking for shared ownership. If after a few months there arent ne offers it then goes on the open market but at what its worth then (if u get me)

xxx

 

[Strangeness]

We have just purchased 50% of a property and pay rent on the other 50%. The same as Tori once a year is up we can buy more shares and staircase as they call it. If you want you can buy 10% at a time depending on how much money you have. Things to look out for are new builds, they are always more expensive and usually have a monthly service charge. Also after a few years they are not classed as new builds anymore and can decrease in value.

Our house was built in 1915 and it's brilliant! A 50 % share cost us £60,000 and we pay £105 a month in rent. For us it's cheaper than a private rent! If you want to buy more shares you can just add them on to your mortgage or if you have cash I can imagine you could pay outright for the shares. Any alterations you make on the property that adds value is yours say you build an extension, you just ask the valuer to discount the extenstion and they value it without that and then with and you make the profit.

Selling seems to be a lot easier these days, a lot more people are wanting a shared ownership property. I would look out for good areas etc so you have more chance of selling. Our house is right opposite a huge park and playing fields so it appeals to a lot of people! We're also close to town but not in town. When we applied for this place there were about 6 other people wanting to view it and we phoned on the day it was put up for sale!

It's been brilliant for us and has got us on the property ladder even if it is only with half a share but without it we would have been private renting. It's definately something to look into!