Buying a shared ownership property

[simon.r]

My son is looking to buy a flat in Poplar, London, but due to the ridiculously high property prices in the area he's limited to buying a 40% share, on a 'part buy, part rent' basis.

It's a situation I've never been in, but I think we've covered the obvious points between us.

Having said that, any thoughts on things to consider when buying on this basis would be appreciated.

 

[vickster]

A friend of mine has something similar in docklsnds and due to the massive increase in house prices, he's now paying much more a month for the rent part but while the bit he owns hasn't increased much in value

I don't know the exact details but definitely read the small print

 

[simon.r]

A friend of mine has something similar in docklsnds and due to the massive increase in house prices, he's now paying much more a month for the rent part but while the bit he owns hasn't increased much in value

I don't know the exact details but definitely read the small print

So is the rent linked to the market value?

 

[vickster]

So is the rent linked to the market value?

I believe so in that case. I don't know any more detail I'm afraid
You'd need to look at the specifics

 

[Levo-Lon]

Its 50/50 as to whether it will be ok

 

[Jimidh]

A friend of mine has something similar in docklsnds and due to the massive increase in house prices, he's now paying much more a month for the rent part but while the bit he owns hasn't increased much in value

I don't know the exact details but definitely read the small print

Whilst I don't know the specifics that doesn't make any sense. Surely if there has been a massive increase in house prices surely his share would have increased in the same manner. Unless of course it's not a true ownership scheme.

 

[vickster]

Whilst I don't know the specifics that doesn't make any sense. Surely if there has been a massive increase in house prices surely his share would have increased in the same manner. Unless of course it's not a true ownership scheme.

As I said, I don't know the details. I don't think he has a very big share

 

[ColinJ]

I know someone who lives in a shared ownership property (a 25% share). She has lived there for 30 years without any problems, and I think she got such a good deal at the time that it has probably worked out cheaper than buying 100% of it or renting an equivalent property. Obviously though, she has missed out on 75% of the increase in value of the house; if you factor that in then perhaps it wasn't such a good deal. She has been responsible for 100% of the maintenance costs over the years, mainly a new boiler, guttering and a couple of roof repairs.

 

[bikingdad90]

I have sent you a rather long message with some details in. I work as a Capital Accountant for a Housing Association and we sell this product all day long.

 

[simon.r]

I have sent you a rather long message with some details in. I work as a Capital Accountant for a Housing Association and we sell this product all day long.

@bikingdad90 A public thank you for your message, advice and replies to my questions

I have had a number of occasions to thank cylechatters for their help and I'd like to think that I've been able to offer help on a few occasions as well.

Which just goes to prove my theory that most people are pretty decent

 

[Doseone]

1. Some lenders won't lend on shared ownership
2. Check very carefully that the full value (not just the percentage that your son is paying) is actually the market value for that type of property. New build shared ownership developers often inflate the prices.