Buying a house - Shared ownership

[MontyVeda]

Anybody bought a 'shared ownership' house, or has any experience of the idea?

There's a new development on the edge of town offering 25%, 50% and 75% shared ownership... but what I'm wondering is just how secure it is.
What happens if it needs a new roof or significant structural repair? Is it a shared cost or something that the resident owner would have to fork out for in full?
What happens if/when the other owner wants to sell their share?

 

[FrankCrank]

Had one way back on first leaving parents. Part of the deal was paying into a monthly maintenance fund to cover all these types of things.
Ours was quite extortionate given the little maintenance they actually did, but guess they vary per project.

 

[Sharky]

My son bought his first house on a shared ownership basis. It meant that the deposit he needed was only the % amount of his share. So was a good way to get started on the housing ladder. But he had to pay rent on the share that wasn't his.

Overall, I think it worked out cheaper than the mortgage that would have been needed to buy the house outright.

But you need to study the T&C's, covering maintenance and what happens when you want to sell.

Also, if you want to sell while new builds are still available, your future sale price may be capped by the price of the new builds, which could be more attractive.

 

[bikingdad90]

With shared ownership you own part of the property and the other bit is rented. It is based off market value at time of sale and means tested.

Your rent increases in line with CPI +1% and you don’t normally get a downwards adjustment.

Generally you are treat like a leaseholder and have to pay for most things.

There are model leases available online here
https://www.gov.uk/government/collections/affordable-homes-programme-2021-to-2026-model-leases

The newest lease model offers a minimum of 10% and either buying 1% per annum for 15 years or buying in chunks. The older model starts at 25% and minimum staircasing percentage is higher.

If you later decide to sell, you technically get bought out by the landlord and they then resell the share either for the same amount or a higher percentage.

 

[bikingdad90]

There is also another product called rent to buy where you pay 80% of the market rent and the 20% is used to save for a deposit.

The tenancy is usually around 5 years and you either buy or move onto market rent or end the tenancy.