General flat questions

[Glaucus]

Has anyone done this and been through the process? if so would you do it again? Or is there to many negatives? quite worried about what will happen with houses prices due to brexit and I wasn't even looking at shared ownership, but some nice flats have come up in the right area. The cheaper 1 bed duplexes are about £620 with mortgage, rent and fees which include management, ground upkeep, building insurance and on-site gym) and go up from there, add a balcony for about an extra £50 a month. Looks like a nice development, acres of ground, fishing lakes, allotments, bbq areas etc.

just looking what peoples opinion are on shared ownership as I have been against it, but these look very nice and more importantly in a great location for me.

 

[Psycho Sonny]

they are good if you don't have the cash to buy a similar property outright.

they are for people who are just starting out on the property ladder. there is nothing wrong with them if you are in this position and can't afford anything better outright.

 

[Ukadder]

We were shared ownership for 4 years until Feb this year when we moved and purchased the next place outright. Most people are against it because they don't know really how it works, yes buying outright is always better as you'll be free to do as you please, but that is not always possible. For me it's the cross over between rent being dead money and buying and building equity but you have the piece of mind the landlord won't decide to sell the place your renting.

Personally I think it's a good system, if I was in the same situation at the start I'd go into shared ownership again. It gives you the chance to get a foot on the ladder with a decent place that wont cost the earth to either run or maintain. We couldn't have lived in a house as nice as our shared ownership one, due to very little deposit at the start. When we finally sold we had a decent amount of equity which was then enough to move on. Different housing associations are different in terms of their lease however, some might have a lower % they can increase the rent year or year to another one so do the calculations and work out if it looks good value or not.

Things to remember:

• You only get the same % increase as you have brought. So if it goes up £10K you'll get £4K if you had 40%. This also works if prices go down, if it goes down £10K you'll only be £4K down.
• You'll be very limited in terms of what you can do, we were not allowed an outside tap or to move the shed for example. Being in a flat however it won't make much difference to you.
• Some might let you buy it outright (100%) some won't. Some even if you do buy outright you will have to give them "first refusal" for a set period of time if you sell, ours was 10 years after we purchased outright we still had to let the housing association have it first at the market rate (set by a RICA valuation) This can work well however as you'll save estate agent fees if they decided to buy it from you.

 

[Glaucus]

thanks, good to here. How does the mortgage work, do they have a list of vendors you have to use or what?

 

[Buffman]

I would check the interest rates on the mortgage, I know someone who got one and the rate was pretty terrible (around 4.5% I recall).

I think there's a limited number of mortgage products which will cover them, but I've no experience of them.

 

[Glaucus]

I would check the interest rates on the mortgage, I know someone who got one and the rate was pretty terrible (around 4.5% I recall)

that's pretty normal for any of the help to buy schemes. although that is likely to be a 5year fixed.

 

[Ukadder]

Mortgages are fewer but most of the big providers do them still. The interest rates are normally a bit higher but I think that's down to the small deposit most people have when taking out a shared ownership as much as anything.

I always used https://www.sharetobuy.com/shared-ownership-mortgages for looking at mortgages, but I'd also say go to an interdependent mortgage provider, they are normally free and could say you a fair wack of money so nothing to lose.

They did have a preferred vendor which we had to speak to, who came back with a much worse mortgage than I found myself. They had no problem with me using the one I found.

 

[Glaucus]

Thanks very much, one other thing can you haggel on price or do they stay firm on the asking.
I submitted the help to buy form so should get a yay or nay from that part by Friday.

 

[Ukadder]

I did try and get a few extras added and a quick enquiry about the price but they were having none of it, so I'd say haggling is a dead end personally.

One nice thing, which I think is standard, is ours came fully carpeted and finished so we didn't have anything to buy except a fridge and curtains.

 

[Jim99]

The mortgage rate doesn't have to be high - all depends on your deposit. My shared ownership mortgages were under 2%.

I did it and would happily do it again, good scheme.

 

[Glaucus]

One nice thing, which I think is standard, is ours came fully carpeted and finished so we didn't have anything to buy except a fridge and curtains.

yeah these come fully finished even has zoned under floor heating.

 

[Jim99]

Thanks very much, one other thing can you haggel on price or do they stay firm on the asking.
I submitted the help to buy form so should get a yay or nay from that part by Friday.

I bought from a previous owner and sold onto a new buyer, and in all cases the price was fixed. There's a faint possibility it's different when it's a new build, but I doubt it.

 

[FishFluff]

I bought my current house, 10 years ago, using shared ownership and it's been ok so far. I own 87.5% of it. There's only a few mortgage providers that do shared mortgages and it's worth considering that when you come to sell you have to get the shared ownership scheme involved. I'll be looking to move in the next few years and I can already see that it could be a real hassle as both parties have to come to an agreement about the valuation.

The mortgage rate that I got was pretty good (at the time) and I've since switched it to an even cheaper deal with the same bank. Interest payments on the loan element are pretty much negligible.

I think if I were to do it again, in my case I should probably have just waited and tried to save up some more deposit (or gone cap in hand to my parents...), but when you need an extra 40% or so then I wouldn't hesitate to have one.

 

[Glaucus]

well i had mortgage in principle end of last year for 130k, but that means buying 15 or so miles further away, these start at 150k and the one I like the look of is 160k, although it would depend on the exact breakdown of costs I don't want to stretch myself.
and rather than being 30min drive away from friends, work etc, ill be just a few miles away from both.

 

[Ukadder]

I can already see that it could be a real hassle as both parties have to come to an agreement about the valuation.

This shouldn't be the case, when selling you'll need to get a RICS valuation (£400ish) but whatever they value it at as long as the housing association accept it (I can't see why they wouldn't, as they are the ones who state get a RICS valuation) then the price is locked so there is no offers or agreements about price to be had. Don't waste your time getting an estate agent to value it as they won't accept it.

One thing I would say is, if given the option, arrange your own RICS valuation. The reason for this is they are then working for you, not the housing association so you might find that works in your favour, I know it did in my case as I could put forward a case for why I think it was worth X value.

 

[dalehitchy1]

well i had mortgage in principle end of last year for 130k, but that means buying 15 or so miles further away, these start at 150k and the one I like the look of is 160k, although it would depend on the exact breakdown of costs I don't want to stretch myself.
and rather than being 30min drive away from friends, work etc, ill be just a few miles away from both.

I was in a similar situation ... The house I was looking at was 150k and was a FTB. My pay isn't amazing and that was at the top end I could afford. I felt I was unlikely to pay off the schemes percentage in 5 years (if I wanted to decorate and furnish) ... And the amount could possibly be higher if the value of the house goes up.

The final straw for me was all the properties being leasehold. It seems to be common on new builds and help to buy schemes.... They know they can get away with it because FTB are desperate. It looks like the government is going to intervene with leaseholds on future purchases but I don't know when that will begin.

 

[Glaucus]

as i'm looking at flats, no way I could afford a house now 3 years ago or longer I could have. They will all be leasehold anyway. virtually no flats are freehold.

 

[dalehitchy1]

as i'm looking at flats, no way I could afford a house now 3 years ago or longer I could have. They will all be leasehold anyway. virtually no flats are freehold.

Ah ok... Yeah it's common with flats and I wouldn't mind with flats as you can't all own the same land so it's expected.

I presume your further down south than if prices are like that for a flat. It's nothing compared to London but still pricey compared to my area.

 

[FishFluff]

This shouldn't be the case, when selling you'll need to get a RICS valuation (£400ish) but whatever they value it at as long as the housing association accept it (I can't see why they wouldn't, as they are the ones who state get a RICS valuation) then the price is locked so there is no offers or agreements about price to be had. Don't waste your time getting an estate agent to value it as they won't accept it.

Thanks for the tips Do you have to accept offers >= to the RICS valuation or do you have some flexibility if you want a quick sale?

 

[Ukadder]

Thanks for the tips Do you have to accept offers >= to the RICS valuation or do you have some flexibility if you want a quick sale?

You will have to accept whatever the RICA valuation come up with, no +/- to that figure. People won't be able to offer more as the housing association won't accept that, because it's classed as "affordable" housing.

In terms of sale time, it's generally said it takes longer for the process to happen when selling a shared ownership because of the 3rd party (housing association) involvement. We were sold in 4 days but it took 5 months to finally move, but we were in a chain of 4 people and a few things held it back.

The best bet to maximise the value you have it to talk nicely to your RICS valuer and put the case to him as to why it's worth what you hope to get, they work out the price based on similar property's which have sold locally (I think they have to provide 3 as examples) but they can take into account a rise in general market prices as well. Again, because we picked out RICS valuer, and he was working for us, he gave us the top end of what he thought it was worth as we were selling, were we buying the rest of the share he would have valued it to the lower end, but he told me to never tell anyone that!