The Pro's and Con's of Shared Ownership Properties - First Time Buyer Secrets
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- Опубликовано: 5 сен 2024
- It is really important to know The Pro's and Con's of Shared Ownership Properties - Watch this BEFORE you look for Shared Ownership Properties!
Shared Ownership Properties can be an excellent alternative if you can't yet get onto the property ladder the traditional way. However, there are pro's and con's of shared ownership properties.
In this video I provide the pro's and con's of Shared Ownership purchases and a "Must Know" list you can download and check when buying your shared ownership property and obtaining your shared ownership mortgage. You MUST check with the housing association - Do not get into a shared ownership deal until you know everything within the terms and conditions.
*** Show Notes, and Resources ***
Make sure you know:
- Monthly rent
- Ground rent
- Service charges
- Can you Stair case ?
- Do they work with all mortgage lenders ?
- New build have different mortgage rules to traditional properties, does your lender allow shared ownership ?
- Obtain a MOS (Memorandum of sale) after purchase and the shared ownership documents
- Double check the mortgage lenders criteria as flats can require more of a deposit than houses
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⚡QUESTION OF THE DAY: Are you considering a shared ownership mortgage ? Let me know! 👇👇👇
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⚡QUESTION OF THE DAY: Are you considering a shared ownership mortgage ? Let me know! 👇👇👇
Hi, thank you for the video and information. My question: Is shared ownership better than help to buy scheme since it helps to give you 20% interest-free for 5 years. FYI: I am considering a new 3-bed build property to buy (£170k) with its maximum (75%) ownership. However, on the other side, I have little better features (area, toilets) achievable from £195,k. I can go for either of them but help to buy would allow me to be rent-free or interest-free for 5 years. I would be thankful if you could advise on this matter. Cheers!
Yes I am
LAMAS TOLU excellent! Have you found a property or at early stages ?
Early stage
Im looking for property outside london (like 45min drive to London)
LAMAS TOLU this is a good place to start www.sharetobuy.com/
Was the only way me and my wife could get on the ladder and I’m so pleased we did. We now own 100% of our property
I know this sounds cliche but thank you for giving me this advice. Given the impact it can have, it is not a light topic. Thank you
I second that I'm 21 years old moving out and I feel so lost on these subjects
@@elecrticgamer I third that
@@elecrticgamer To be 21/22 and thinking of this is just fantastic tho. Keep it up!
Brilliant video I am currently studying my CeMap at the moment so this is helpful for revision purposes! These are some other disadvantages that came to mind:
• the property can be harder to sell the later down the line
• stair casing can be costly and can involve payment legal fees and other costs each time
• a lot of housing associations only allow you to buy them out 10% at a time when staircasing!
Thanks Ella! Some really great points there you make and great you are studying CeMAP. Thankfully the government will be reforming the model and making changes such as being able to purchase shares in 1% increments, which will be great for first time buyers!
Government link here with more info - www.gov.uk/government/news/changes-to-shared-ownership-to-help-more-people-get-on-the-property-ladder#:~:text=The%20government%20will%20review%20a,to%20buy%20in%201%25%20increments.&text=People%20use%20shared%20ownership%20to,subsidised%20rent%20on%20the%20rest.
Im Canadian living in the UK for 10yrs now looking to get on the ladder with my partner. She brought this option up and this video makes me understand what this scheme is all about. Thank you so much!
go back there is nothing in this country but rain and its snows over there (this is meant with good intentions )
*YOU Sir.....are one of THREE most helpful. I love how you "speak/explain" in plain simplified English & not housing jargon lol*
*I do have many questions though.....*
Thank you for your kind words! And fire away with your questions ?!
You are so kind and nice to people here. I can't afford to buy yet, but I will subscribe because I am impressed with how sweet you are with random people trying to get some free advice 😅
Thank you so much! I'm glad you are getting value, and thanks so much for your kind words it really is very nice of you and means a lot!
Ground rent is usually payable when you own 100% of the property unless stated by the Housing Association of their properties. Shared ownership is a massive help for first time buyers getting onto the property ladder for the first time
Thanks for sharing that with us, appreciate you watching and the comment!
@@alexkerrmortgage just like to share my experience and knowledge and help😊🙌
Thank you so much for this video. Today I started to look at shared ownserhip again & found my ideal property in my ideal location, so I made an enquiry but I know there's so much more involved. So, I will watch this again & take notes & download the attached. Thank you Alex!
Thanks very much! Good luck, if you are going it alone! We are here if you need us, just get in touch. Good luck what ever direction you decide!
I like the calm way you explain everything! Thank you!!
Anisa Trs Thank you!
Hello dear, how are you doing today. I like to be your friend if you don't mind. Please do not be mad at me ok. I was checking your profile picture so I see you and like you
Another massive thing to consider are premiums which can take you overall upfront costs so much higher
Thanks Simon.
I dont understand one thing and I will try to explain it. I was looking for home but where I live its too expensive and I can't afford it so let's say properties are 200k and I can get only 100k mortgage. Lady in the bank said to me that I can go through shared ownership but here is what I dont get it.. 200k mortgage for example would be 1k every month to pay which I can easily afford, but bank can give me only 100k because of me earnings. Shared ownership - OK u get 100k mortgage which will be 50% value of house but rest I need to pay rent so it will come 1k per month anyway!! So why they can't give me that 200k mortgage. I will pay the same money every month anyway. Weird
Hi Cheryl, thanks for watching the video. Do you normally find that the combined mortgage and rent payment will be cheaper then when compared to the full price of the property if you had a full mortgage. I hope this helps, Alex
I’ve always wondered this! I actually bought 50% and am in the process of buying the other 50% share in the coming weeks.
Give or take, my monthly costs remain pretty much the same.
On SO my mortgage was a higher interest rate than a normal full mortgage, hence making the cost pretty much the same.
Why I couldn’t get the full mortgage in the first place with access to the most competitive rates, just makes no sense to me.
Presumably it’s to do with the amount of risk the lenders assume by lending £100k vs. the full £200k.
Just a correction. We purchased a property on the OPEN market. But the Housing Ass had to vet the property. 1 condition was it had to be newish...Second I stair-cased from 50%-100% with no fees......yep no fees. It was a promotion. Maybe they wanted to reduce their commitment.
Thank you Alex for helping first-time buyers. It makes a bit more sense now
Anytime. Any questions let me know. Alex
Seriously thank you. Made it more clear in my head about shared ownership
The information you provide is by far the clearest and most straight forward I have found on RUclips - keep it up!
Thank you, plenty more videos on the channel for you and thanks for watching!
My local area is undergoing a regeneration project and is expecting 100s of homes in the coming years. I saw shared ownership was going to be an option but had a misunderstanding of what it meant. Your video was so helpful - I feel more confident now.
That is awesome!
Thanks for sharing this. Never would have thought to ask some of these questions.
I'm living in Scotland and looking to buy a property with the help of the Scottish government First Home Fund scheme, my main reason is that it reduces the monthly outgoings and so with savings built over time i can buy out the share owned by the government. I haven't read much things on the scheme that would ring any alarm bells but am hoping to get something in a decent school district.
Great video Alex, thankyou for clarifying as reading through pages and pages of info is mind boggling. You're very approachable and easy to listen to, thank you, I have subscribed!!!👍👍
My pleasure! I appreciate that, thank you!
We've gone with help to buy instead of shared ownership. I know not everyone can do it. My friend does SO, owns 40%. Her interest rate on her mortgage is 4.5% and she's only paid £780 off her mortgage in 3 years. Our mortgage with HTB is 1.7%. I didn't know SO mortgage rates were so much higher!
It all depends on your circumstances, there are lower shared ownership rates as well… Thanks for watching, Alex
Worst thing we ever done buying a shared ownership flat. When we first moved in the rent and service charge was very affordable. Within 2 years the rent and service charge went up by £200 pcm. And whenever you call up the property management they just say the money will go up by minimum of 1% every year. I'm estimating within the next 5 years this property will be deemed unaffordable for us. Just be aware it starts off great but inevitably your bills will sky rocket
Hi Adam, thanks for sharing. Who is the housing association ? Alex
Great information. Thanks Alex !
Thanks for Sharing, very informative! I have a question regarding stair-casing, why do you need to buy more shares when the rent/mortgage ought to go towards the ownership?
Hi Oselzore, thank you for your question. With shared ownership you part own the property. Your payments go towards reducing your mortgage balance and the percentage you do not own, you rent that part of the property from the housing association. So for example if you owned 50%, you would pay a rent for the remaining percentage. So shared ownership is seen as better than renting, as with renting you own 0%. Does that make it clearer ? Alex
Thanks for the information given it sounds better for shared ownership
Thank you for watching! I will have an updated version out soon, as a few things have changed.
Say we get a house for the 50% shared ownership. When we go to sell a few years later if we haven't staircased, would the 50% be taken from the sale price or the original amount of the house price, Really hope that makes sense aha
Any increase in value will be 50% yours!
I've found this very informative, thank you very much.
Great content but do have one criticism, 6:50 you talk about how much the service charge is, but then you just go on to say that there is a service charge... I respect that it may be different for different areas but a ball park figure would have been better than none in my opinion.
Hi John, thanks for watching and the feedback. Let me see if I can add something to the notes below to make that clearer.
I am planning on doing a new one in Jan 21, so will be sure to make that area clearer.
Thanks for the feedback and take care 🙏
Alex
*THANK YOU SO SO MUCH for you videos.....absolutely appreciate you!*
I DO apologise in advance if my questions are longwinded & somewhat....daft!! 😜
May I ask kindly:
1. Is Shared Ownership therefore isolated to SOLELY new builds?
2. Or does it extend to "second hand" homes too (implications if so)?
3. Does the fact that we'd be First Time Buyers in our 40s & 50s go against us in any way?
4. I see you've provided an email address in one of your threads...is this for free impartial advice from you directly?
5. What exactly is Stamp Duty & is it applicable on Shared Ownership?
6. Is Shared Ownership the same as Shared Equity?
I'm so sorry for the 109 questions lol.....just needing to be *absolutely* sure & educated on this..... as this is a MASSIVE investment.
Is Shared Ownership therefore isolated to SOLELY new builds? No, this is any shared ownership property, both new build and second hand properties available.
2. Or does it extend to "second hand" homes too (implications if so)? Yes. Implications... Same rules apply as new builds.
3. Does the fact that we'd be First Time Buyers in our 40s & 50s go against us in any way? Only the maximum length of term you can have (Until age 69 max or 74 if you have a private pension)
4. I see you've provided an email address in one of your threads...is this for free impartial advice from you directly? Yes - alex@mortgagechain.co.uk
5. What exactly is Stamp Duty & is it applicable on Shared Ownership? This is a government tax you pay for buying a home. It only applies to the share you buy and if that share is under 300k (or 500k until March 2021) you have zero stamp duty to pay as a first time buyer. Here is our stamp duty calculator for reference: mortgagechain.co.uk/stamp-duty-calculator/
6. Is Shared Ownership the same as Shared Equity? No, shared equity is more a reference to the help to buy equity loan.
I'm so sorry for the 109 questions lol.....just needing to be absolutely sure & educated on this..... as this is a MASSIVE investment. No problem! I hope this answers your questions, any more let me know! :-) Alex
@@alexkerrmortgage Cheers. I've since purchased a home.
thank you first step to buy property
Thanks for the vid. Informative intro vid for me in the subject of shared ownership.
No worries and thanks for your message Poe Gerard! We have also released a more recent video which in the notes includes a link to the new government changes coming into effect which will make shared ownership much better! Video here - ruclips.net/video/_qCR6gFJFX4/видео.html
Hi there. Thank you very much for this video is very informative.
Couple of questions if you have the time to answer:
1. Who is responsible for maintenance in the flat? For both appliances and the flat itself (e.g. flooring, windows, electrics etc).
2. Is it possible for the housing association to decide to sell the flat and kick you out?
3. I've had a look online and I've seen quite a few people saying that it is difficult to sell if you want to move up the ladder and can lose money.
Thank you
Hi Dimitris! 1) the housing association would cover the buildings insurance and you would be responsible for the contents. 2) unlikely they would do that unless you broke any terms. You would know the terms before going into the purchase as the housing association would supply them. 3) lots of factors come into account that effect saleability! Location, demand, the property itself and all sorts of stuff like that but being a shared ownership property would unlikely be the sole reason it doesn’t sell... I hope this helps ? Alex
@@alexkerrmortgage thanks Alex. So from what I understand you need to look at the terms for each property individually? Is this where we will find if a cat is allowed in the property?
My partner and I are very interested in shared ownership. Living in London and with our current salaries/deposit there is no chance we can buy normally.
And paying rent really feels like throwing money away especially now that we are getting older...
Any housing associations out there that you know have a good reputation?
Cheers
Awesome video Alex. Very handy!
very informative. just missed the fact that if you need/want to sell your share, that you cannot negotiate what you sell your share for. the leaseholder can state that you can only sell your share for X or more, and if you get an offer for £1000 less than X, you cant accept it.
Hi Bruno, that’s a fantastic point and thank you very much for sharing, very helpful. Have a lovely day and any questions let me know.
Man thanks for your content 👍
A very important point which you forgot to address .. are shared ownership more difficult to sell ..
Depends on the area and build all the resales I looked at were gonna pretty quick .. I think it’s a general problem with new builds my brother couldn’t sell his as fast not share to buy, but so many news one were being built at the same price
So if you want to staircase from 50% ownership to 60% for example, is a new mortgage needed, the current mortgage extended in terms of years, or the monthly payment adjusted?
Hi Tony, the best time to get more shares would be the point your current mortgage deal expires or if the lender you are with allows you to do a further advance to buy extra shares... We always try and recommend lenders that work this way.
Great video. But shared ownership sounds like a terrible idea.
Naomi and Jack thanks for your comments. A lot of people share this opinion, especially on a long term basis. However there are plenty of good housing associations and the biggest positive for shared ownership is that it can help people on to the property ladder where otherwise they would not have had a choice. Always make sure you can buy a bigger share later on is my biggest tip. This is called “stair casing” 👍🏻
@@alexkerrmortgage I agree it's better if you have the option to buy the rest. But great explanation of the topic.
Naomi and Jack thank you very much, very kind. 😀
@@alexkerrmortgage hi. Why would it be a bad idea for longer period to own shared ownership property ? Maybe for some people it's enough to own 25% of the property, pay off the mortgage and just pay the rent and the charges like 300 pounds a month . This way it's still much cheaper than to rent a property where you pay more and you don't even own anything from that house.
Thanks in advance for your answer :)
@@ggggg895hungary Hi G! Only if you do not purchase more shares later is it not as effective as it could be. However with the governments reform of shared ownership, you will be able to buy shares in 1% increments, rather than a minimum of 10%, which in most cases in the minimum you can purchase, meaning some people can't afford that, and never purchase further shares. However with this new reform mean's longer term will now be a better option as purchasing an extra share will be much easier. Does that make sense ?! Alex
Very informative tips. Thanks for sharing.
Good information, thank you.
Thank you this was very helpful..
Glad it was helpful!
Hi Alex
W'd you make another video with explanation about how share ownership property selling process looks like?
I’ve put this on my list :-)
New subscriber here! Thanks Alex this was brill :)
Welcome and thank you very much for subscribing Mya, sorry for the late reply, it's been a mad few months!
Thanks for the info. I'm a 43 year old single mom and recently started my own small business. I make 1.75 k a month now, and forecasting to hit 2k in the future. I saw the shared option and I'm wondering with my income now whether I can buy instead of renting. I am also hoping to increase my income. I am saving up for 5K deposit. Am I dreaming or is it possible with my income and age?
All depends on property price and your net profit. Have you got 1 years trading history yet ?
@@alexkerrmortgage Yes, and 6 months since earning this much. Thank you!
@@RichGirl. it’s still possible. Feel free to book a free chat so we can discuss further! link.alexkerr.co.uk/mortgage/ftb
Thanks for the info
Hi and thank you for your useful videos. I'm thinking about doing shared ownership , but wanted to know is there a way of roughly calculating how much my mortgage, rent and service charge will be?
Hi Kuomi! Please see this video on this subject :-) ruclips.net/video/raHv6xnO8lE/видео.html
Thank you for this
Excellent video. The first I've seen of yours. I personally would never touch shared ownership. All SO properties being leasehold kills it dead in the water, long before I consider the other issues I have with it.
Hi Mosher Mike, thanks for your comments! Leasehold is the downside, but it does beat renting as at least you own some equity and can buy further shares later!
Also it worth noting that some Housing association will convert it to a freehold once you own 100%
superchargemario hey superchargemario, excellent comment to the first time buyer community, thank you!
very well said sir very clear
Hi, Alex thank you for this helpful video. I would like to know about the lease condition. What minimum remaining years we should looking to before buy the property? Kindly please reply.
Ideally 90+
@@alexkerrmortgage Thank you.
The thing i don't understand about shared ownership is that if i were to buy a cheap small flat the mortgage repayments could be around £320 a month. But with shared ownership the same size flat is heading for over £600 with mortgage, rent, service charges etc. So how is this helping with regards to affordability or helping people to buy homes?
Hi Gemma, can you provide the links to the two properties you are referring to? I'm not sure of a situation like this, unless the properties are in completely different locations? Keen to help you figure this one out!
Hi Alex,
Great video!! We bought a 50% shared ownership flat and planning to buy another property for investment to rent out. Is it possible to buy an investment property if we bought our first with help to buy and shared ownership? Many thanks for your answer.
Olivér Nagy hi Oliver, yes that is fine! Not an issue at all. I actually have it on the list to do a video for a first time landlord. The deposits are a bit bigger. Are you aware of that ? Alex
alexkerrmortgage Thank you so much for your answer Alex! Really appreciate it. Also I didn’t know about the higher deposit so thank you for that as well!
I have a question, my husband is technically a property owner, he and his siblings received a house as an inheritance, my husband was the mortgage "owner" the house has now neen sold and we currently rent (we never loved in the house) does this disqualify my husband and I from shared ownership? I am unemployed, my husband works full time.
I’m pretty sure you should still be fine with shared ownership… Feel free to book in a free chat if you want to look into the options. Here is the link. link.coursecreator360.com/widget/appointment/mortgage-chain
Hmmm when I bought my shared ownership house 10 years ago they only own 26% of my house.
so you now own 74%, you have done well!
Het Alex, great video! i loved it. I dont get who owns the other part of the asset. Is it a construction company or the goverment? Thanks
Fernando López thanks Fernando! the housing association ! That’s who you rent the part you do not own from. Does that make sense ? Alex
topman Thanks for the good advise
thank you :-)
Thank you for this video! One question please, so if you go for a property of 25%, you're paying the mortgage but also rent.
Does the rent go towards the remaining 75% of the property? Or is the rent going nowhere? This is the part that confuses me as I'd like to know whether it goes towards the total payment of the property or whether it's just for residing there while making payments.
Thank you very much!
Your renting at a discounted price because you own part of the property. The rent is not paying off the 75% because someone else owns that your just paying them to live there.
The mortgage payment will reduce the balance on the share your own, the remaining share you pay your rent to the housing association, so the housing association benefit from this element. I hope this makes sense, any more questions please let me know.
@@alexkerrmortgage So, when can be 100 % ownership and methods?
Pure cons out way the Pros by far!!!!!
Hey! Thank you for the video, really useful. My partner and I are looking to buy a house in about 4 years time, at the moment it only seems like we can go shared ownership. We have been looking round and seeing what the prices are now and it works out to be around £700 each, inc. bills, rent and mortgage. We would like to staircase too. We have found an area good for us both, would you recommend we go shared ownership starting at 50%, or rent? Renting seems so expensive for what you get, thanks.
Glad it was helpful! I always say that shared ownership is better than renting.... as owning 50% is better than owning 0% when you rent! You have a mortgage and should be creating some equity for yourselves so you can buy outright later on. Good luck! Anymore questions let me know. Alex
alexkerrmortgage that’s true - thank you very much :)
What happens when it comes to selling your share? Do you sell it back to the house association? Who would want to buy your specific 45% of a house? Seems daft to me
You would sell it to the general public, and it would go on sale on the normal portals, Rightmove Etc
Do you still have to pay rent and service every month even after you finished paying off the mortgage?
You would only start paying the rent once your own 100% of the share.
@@alexkerrmortgage
Thank you
Hey, thank you for the video. What happens when you come to sell? Do you just advertise your share to other potential buyers as normal on for instance Rightmove? And is it harder to find buyers because of this? Thanks!
Hi Mike, selling is very similar to a normal property sale and yes it would go on all the portals. The housing Association may help or they may have estate agents associated with them! Double check with your housing association. Alex
I’m looking to buy my first property. Given current situation ...I think I am on hold now. My annual income is low and I am single, which is not helping me either. My Question: which % is the best to start? I am aiming for 50% minimum... and also, is it possible to buy out the property entirely after xxx years? Thanks, good video.
You can "staircase" which means buying more equity. In regards to a share you can buy, you would need an affordability check. Maybe use a lenders affordability calculator to give you an idea.
Both partner and I are early fifties.. wondering if we are now too old
It would mean a shorter mortgage term so that would need to be affordable. Email me your incomes and outgoings and I will take a look. alex@mortgagechain.co.uk - Thank you for watching!
Just a quick question when I finish paying off my 25% worth on the property do I still have to keep paying rent or do I stop op up or do I have a choice to keep pain so I can pay off the house and have it as 100% of my own.
Hi Cassandra, thank you for the question! You will always pay rent on the share you do not own, up until the point you own 100%!
Thank you
Welcome!
Thanks for your nice video ,,, one thing I ask can we have right to sale our share anytime???
Humera Faisal hi Humera, you can sell your property of course, but housing association rules can vary, so it’s best to check with them the terms at the start... but you can sell the property of course, you are not tied in for ever!
Very good video, what happens when the mortgage has been paid off, if you don’t have money in the future to staircase, thanks
Then you would just own your share in full…
I'm a therapist would I be able to work from with shared ownership ? Or would I be limited and classed as a tenant?
Hi Char, of course, there are no restrictions to that working sector. As long as income etc works out then yes!
Thank you... If anyone can answer....who will be responsible for internal repairs on shared ownership...
I think they’ve updated it now so whoever owns the percentage you don’t will pay for repairs for 10 years
You at the moment, but shared ownership is being reformed and will soon be the housing association. It will be under the affordable homes scheme, I have not heard on a release date as yet but will do a video when it is active
@@charlottecollins9215
Thank you... that's relief and good thing
Hi Alex,
Im considering a shared ownership mortgage. I am committing myself to work in an area for around 2 years minimum probably closer to 3. The reason i am considering shared ownership even though i can afford a full mortgage and deposit is that I do not want to commit to buying a full at this moment in time and would prefer as much flexibility as possible regarding my future career. I do not know which path to start on can you provide any advice?
Thanks
Hi Tom, that sounds like a sensible plan! There is quite a lot to it. We offer a free analysis call to go through this as part of our service. If this is of interest please call my team and ask for an analysis call on 03333446869 - Look forward to helping if thats something you are interested in. Alex
Hey dude, Did you ever follow up on this plan?
Really helpful pal 👍
Thanks for watching!
Thanks Ever so much Alex. A question if I may: when you purchase extra shares, do you go through the whole process again? I.e. are there additional cost involved?
It’s a shorter process and the housing association will usually charge for this.
Very helpful video. I have a help to buy ISA, can I use the money in that as a deposit for a shared ownership property?
Dan S you certainly can! You can use it on any purchase and still obtain the bonus. Where are you in your stage, have you started a property search as yet ?
Great video. Are you still locked into the housing association rules and ground rents if or when you own the property outright? Or does this change from association to association?
Good question! It all depends on the housing association. Some will allow you to own the freehold and others will not. However once at 100% ownership there is no rent to pay...
Can you please explain how much you will pay on the mortgage if you put down 5%- 25% of deposit. Cause you talked about the rent, what about the repaying the mortgage
Hi Mizz, all depends on your credit history and the lender and rate.. there is no one answer that fits all for this, unlike the shared ownership rent... You would need an analysis call for this! Are you thinking of shared ownership ?
Can you buy a Percentage with cash, and then rent the remaining Share without getting a mortgage?
I am not sure but I imagine you could buy a share outright, however check with the housing association.
Hi....is it true that all shared properties are leasehold?
Thanks for the vid but I would never touch a shared
ownership, there are many more cons than you have listed.
Its a win win for the HA
Abba Roonie hi Abba. Yes that is right, you pay a rent on the share you do not own, the Housing Association are the freeholder. The reason for making clear the disadvantages is purely as a “approach with caution” message as some housing association rules will be more favourable than other’s so be sure to check. But I am of the opinion that shared ownership can be fantastic if used as a stepping stone if you find a good Housing Association who have fair terms. It’s not a good idea as a long term plan, which is the main reason the downsides are highlighted. I hope that helps.
If you buy a new flat and live there for 10 years. You still may have 90 years on the lease maybe........no big worry in my view. Oohhh and I had no lease on my 3 bedroom home.
Does getting a shared ownership affect how much you can borrow for mortgage. Me and my partner notice as soon as we say it's shared ownerships the amount ee can borrow go's.down anyway. Doesn't this defeat the point of this . ???
The amount goes down because you need income to cover the rent as well. I would focus on the full purchase price and not the mortgage amount as the purchase price will go up compared to buying outright.
How easy is to sale your ownership of the property? Does the house association buys it or does it have to go on the open market? I heard of many people getting stuck in it not been able to sale.
As long as you have equity you can sell it the normal route... However doublecheck with the housing association, as they may need to value it first.
This was so informative! I’ve found a property and now in the very early stages but found it hard finding a 95% mortgage directly with lenders during the pandemic.
Are you aware of brokers who have been able to secure a 95% mortgages at this time?
Hi Donna! Yes, we work directly with lenders who supply 95% mortgages for shared ownership, at great rates! However a lot of these lenders are "broker only intermediaries" meaning you have to go via a broker to access the products.
If you would like a free chat about the options, please just book into my diary!
Link here: outlook.office365.com/owa/calendar/MortgageChainLtd@mortgagechain.co.uk/bookings/
Alex
Brilliant- thanks! Which option shall I book into on your calendar?
@@donnabrown3205 Priority call! As this will get you in within a few weeks... if you need sooner let me know and I will see what I can do!
If you put down a higher deposit than what’s required, does it make your rent cheaper?
A higher deposit would make the mortgage cheaper, buying a bigger share would make the rent cheaper. Does that make sense ?
@@alexkerrmortgage That makes sense! Thank you for responding.
So if I'm right:
If I go for a shared ownership of 40% my rent rate will be 60% of what I paid previously, on top of this will be my mortgage rate
If you own 40%, then you will have a mortgage to pay that 40% and the remaining 60%. You will pay the housing association a rent. Compared against 100% rent, you at least own 40% and a lot of people use this as a stepping stone onto the ladder.
thank you very much
Any time Yona 🙏
What do you mean by you can only look/ buy shared ownership properties?
Hi Caitlin, please point out which area of the video that is so I can let you know! Thanks, Alex
Hi, I think I might know what you mean now… If you are looking for a shared ownership mortgage, you can only buy shared ownership properties. Alex
Thanks for the video. I wondered about the home improvements, since you don’t technically own the ground as a leaseholder, are you allowed to change floor finishes from carpet to something else for instance ?
I've had read over the scheme and you a limited on what you can change. Belive rules will differ from one housing association but general rule is you can change flooring and you can paint and decorte. But you can't knock down and build walls or build an extension on the back
A great answer by Luned below, but the housing association will stipulate these rules, so always check with them!
Yea you can change flooring or anything that doesn’t change or May affect the structure of house
Hi Alex, thanks for the video. Can I use my Lifetime ISA towards a shared ownership mortgage ?
Yes indeed you can use that for any type of property purchase.
Thanks for your videos! Can you suggest some good house associations in London? another question is the does the rent increases and the market value of the property increases?
Hi Marcelo, the rent should decrease as you buy further shares. I cant really recommend housing associations, just look for the online trust pilot and google reviews and that will give you a good idea!
Thank you for all the advice and clarifications. Is there a way to negotiate for owning 50% of the house and pay rent for the remainder? Does it have to start with 25%?
It would start by buying the amount the housing association is selling, 25% is common but you can also get 35% 45% 50% and maybe even 70% as a starting purchase.
I don't see how this is cheaper on a monthly basis when you consider you pay yes a lower mortgage but service charges plus a rent!
Its cheaper when compared to buying the full value of a property with a mortgage, but not a hige difference. The main benefit is you would have access to a property of this value, which might not be an option if buying outright. Thank you for watching.
No way shared ownership to me..TKS a LOTTT
When considering shared ownerships there alternatives:
1. Build a log cabin in your parents garden and pay them agreed keep leaving you enough save money.Debt-free living.
2. Buy a cheap boat with residential mooring leaving you with monthly savings. Debt-free living.
3. Apply for a pre-planning permission before purchasing a building plot to build your dream home and live mum and dad whilst building your home using your savings avoid loans/mortgage.. View as a long term project..
If you take on a Shared ownership mortgages you have committed yourself to debt. How many years of paying a loan to a bank. There are no guaranteed with job security and it difficult to sell on a Shared ownership property that you might never own in your life time.
Quick query if you own a shared ownership house. And decided to buy another buy to let property could you do this?
Check with the housing association first but it should be ok.
Shared Ownership is the biggest con going.
How do they work out the percentage of rent for the remainder of the share? And can you give an example of cost please.
If you use 2.75% as to calculate rent, that will be pretty accurate.
Example: £100,000 property purchasing 35%
Remaining share is 65% (£65,000)
So 65,000 X 2.75% / 12 = £148.95 per month for the rent payment
@@alexkerrmortgage I was thinking the rent would be determined as something like -> (average rent for similar flats in the area) x share you don’t own (ie 0.75 if you own %25).
In your calculation we would be paying interest or mortgage for the share we don’t own, but for who?
Thanks
Nice information sir
Thanks and welcome
Hello! Great video thank you so much.
If you’re considering not staying in your shared ownership for too long (maybe no more than 5 years) would you say it’s beneficial to *not* staircase as it may be harder to sell say 75% share compared to 25% (with the idea in mind that shared ownership is supposed to be aimed at first time buyers with low deposit etc.)
What’s your thoughts on this? Thank you
I would say it’s a good point! But in my experience shared ownership properties seem to sell well and if you’re at 75% then you’re close to 100% so you may as well keep going!
Alex I'm confused. There's a flat with Landspeed Homes that you can buy with a shared equity. You buy 75% of the property and you don't pay any rent or interests on the other 25%. Seems to good to be true. Where's the catch?
I’ve not heard of this, maybe a new type of model?
Hi Alex, recently found you on youtube! Thank you for all your great concise information:)
Just wanted to ask, from what I gather with shared ownership you are responsible for repairs unlike normal renting. Does this mean you are able to do work such as a new bathroom? Also, because of the rental part does it mean there is an inventory check so you would have to pay for things such as nailing a wall?
Thanks in advance! :)
Hi! You have full control over repairs etc, it’s not like renting, you have much for flexibility for home improvements.
However as always double check the housing association rules!
Hi alex it’s very informative , is it possible if we can buy shared ownership with maximum deposit so we have less morgage , and also whats the difference to get mortgage direct from bank and to involve broker .
Hi Saqib, yes it is... a broker will likely provide you with the best lender for you first time, and do all the work for you, where doing it alone would mean doing your own research and understanding the criteria correctly!
I was wondering I have bad credit but I was woundering if I pay 35k upfront that’s the 25 per cent . Will I have to pass credit checks still to rent can I pay 35k upfront and not have a mortgage
I’m not sure about this, I would speak to a housing association about this, I’ve never come across a scenario like this.