New house, shared equity, any views? [Archive]

Riven

20-09-2005, 07:57 PM

Hi all

Myself & the good lady are about to embark on one of life’s great decisions!!

We have seen a brand new 3 bed, 3 story, semi with garage, on a new housing development near to us

As we are currently living with her parents (better than you might think!!!) we qualify as first time buyers (Again!!) so the deals are out there!!

This gaff is just short of 200k and we have been offered a 75% us, 25% the house builder, shared equity deal on the mortgage.

This means that our mortgage will be less than we would need to borrow for most 2 bed terraced properties in our area.

We do not rent the 25% share of the property but the builder will take 25% of the purchase price when we eventually decide to sell.

Has anyone had any experience of shared equity? Any pitfalls or nightmare stories out there?? (cos this does sound a little to good to be true!!)

Dan Gliballs

20-09-2005, 08:09 PM

StPaul

20-09-2005, 08:10 PM

i looked into simular a while back where we would have part owned and part rented but i didn't like the idea, your system looks good though, from what details you have provided i think i would go on that. Good luck whatever you decide.

Riven

20-09-2005, 08:13 PM

I've never been down the shared route TBH.

Do you have the option to buy the other 25% if you ever inherit money for example?

What happens if the house builder ever goes bust....does the 25% become yours? :)

Yes, we can buy the 25% at any time, dont know about the second question, but this is a major house builder so I dont think I will get the extra 25k by default!! :lmao:

Dan Gliballs

20-09-2005, 08:16 PM

Yes, we can buy the 25% at any time, dont know about the second question, but this is a major house builder so I dont think I will get the extra 25k by default!! :lmao:

Sounds like an OK idea to me then. We would probably have had to have done the same if we hadn't got on the mortgage ladder before the huge boom went mad.

I've heard of the 50%/50% ones before, but this 75% one sounds much better :)

danuk

20-09-2005, 08:53 PM

Andy

20-09-2005, 09:53 PM

me and the GF were looking at shared ownership places a while ago,
tbh seem like a good idea, just things u have to worry about are,
if the price falls do they still own 25% or does the amount have to stay above what it is valued at now? most mortgage comapnies dont do shared ownership, the solicitors fees are usually higher but no real prob,

ateotd it is still ure palce, to do what u want with, is just harder to sell, and harder to find a mortgage company,

i decided against it in the end only because we would have had to pay £150 a month rent on top of the mortgage which would mean if we paid the extra £150 mortgage we could buy somehwere outright for the same price,

my advice would be to speak to a solicitor or independant mortgage person and see what there opinions are as they will know whats best,

hope it all goes well for you :up:

Dan Gliballs

20-09-2005, 09:58 PM

at the end of the day the place is still yours and what ever you sell it for you still get your share of any increase.

In Lincoln loads of new posh appartments have been built costing from £110000, but you only pay £55000 and the other half is owned by the housing association whom you pay rent to. Its a great idea, you get a nice place for half the cost.

But surely by paying half of the mortgage AND a rent payment every month, it won't FEEL like having a property at half the cost every month.

Is the rent portion cheap and subsidised?

Dan Gliballs

20-09-2005, 10:01 PM

ateotd it is still ure palce, to do what u want with.....

But IS it though?

Are these properties leasehold or freehold?

Can you pull a wall down/extend etc?

Do you have to pay a management company extra on top for maintenance? :Cool2:

Andy

20-09-2005, 10:07 PM

But IS it though?

Are these properties leasehold or freehold?

Can you pull a wall down/extend etc?

Do you have to pay a management company extra on top for maintenance? :Cool2:

for the ones we looked at, u own it freehold, they just own 25% which u can buy back (normally after 12 months) for its market value at that time,
they send a indenpendant valuerwho decides on a price u have to pay for the share,
u can pull a wall down etc but have to ring them to tell them and as long as it doesnt de-value the building its fine,
also if for example u add a conservatory, when u want to by the 25% share the valuer has to basically pretend it isnt there and value the house without it as its ures not the shared owners,
and for a house u wouldnt have to pay any maintance as u own it,

the ones i looked at u did pay rent tho, which would cover maintenance so this maywell be different,

i spent a couple of months looking into it, (but now looking forward to moving into my first flat :D)

Dan Gliballs

20-09-2005, 10:13 PM

they send a indenpendant valuer......

Who plays golf with the builder and attends the same Masonic lodge :lmao: ;)

Have you found somewhere specific Andy? :)

Andy

20-09-2005, 10:16 PM

Who plays golf with the builder and attends the same Masonic lodge :lmao: ;)

Have you found somewhere specific Andy? :)

lol...must admit i did think that, i think u can ask to get another valuer in of ure own tho,

and yes, me and the GF are in the process of buying a 2 bedroom flat in havant, just waiting for the solicitors to sort it all out,
the easiest £104,000 :eh ive ever spent (and thats pretty cheap around here)

Dan Gliballs

20-09-2005, 10:18 PM

lol...must admit i did think that, i think u can ask to get another valuer in of ure own tho,

and yes, me and the GF are in the process of buying a 2 bedroom flat in havant, just waiting for the solicitors to sort it all out,
the easiest £104,000 :eh ive ever spent (and thats pretty cheap around here)

It's a big step, but you'll enjoy it once you're in :Cool2:

Andy

20-09-2005, 10:22 PM

It's a big step, but you'll enjoy it once you're in :Cool2:

certainly will, wont enjoy the lack of money and lack of a driveway to work on the car tho :shame: guess thats what parents places are for :)

but back on topic, imo well worth getting but get a independant expert in to advise u, some may well charge a bit but worth knowing for sure what ure getting ureself into,
good luck

Paul TD

20-09-2005, 10:30 PM

and yes, me and the GF are in the process of buying a 2 bedroom flat in havant, just waiting for the solicitors to sort it all out,
the easiest £104,000 :eh ive ever spent (and thats pretty cheap around here)

I feel for young couples today, me and Mel bought a 4year old house in Chepstow seven years ago for £44,000. Ok it's only two bedrooms with the option of having a loft conversion, three car drive, large front n rear gardens.We where lucky with work and payed most of the mortgage off early. Now it's worth £115,000 and we rent it out because we couldn't sell it :(

Dan Gliballs

20-09-2005, 10:38 PM

we rent it out because we couldn't sell it :(

Where do you live/what do you live in now old chap?

Paul TD

20-09-2005, 10:48 PM

Where do you live/what do you live in now old chap?

We got a nice old mantion :lmao:

No we bought an older house did it up with help from friends/family not saying where :bust:

Chepstow is great for renting. You've got commuters from Bristol to Cardiff, Gloucester to Bristol plus Chepstow being the Gateway to Wales no prescription charges for under 16s, the only thing that fecks it up is the Severn bridge toll, that's why people rent.

GMad

20-09-2005, 10:48 PM

Sheeat! I realise i'm an old bugger but my first house cost me £12000 and I thought i'd never pay it off!
My current house cost me 40k and is now all payed for. It's now worth £250000 ish, but if I wanted to move to an equivalent or nicer place would cost at least the same if not more, so it's all relevant :think
I really do feel for anyone trying to get on the property ladder nowadays, but stick with it, it'll be worth it.

Riven

20-09-2005, 10:50 PM

Thanks for all the replies folks.

There seems to be lots of schemes available.

With this one there is no rent involved, The builder offers a complete package, mortgage, solicitor, etc (which is manditory if we want to go with the deal) and the builder will take a hit on their 25% (as we will) if the house prices drop at the time we want to sell

Andy

20-09-2005, 11:02 PM

With this one there is no rent involved, The builder offers a complete package, mortgage, solicitor, etc (which is manditory if we want to go with the deal) and the builder will take a hit on their 25% (as we will) if the house prices drop at the time we want to sell

sounds like an excellent deal then for a place, go for it,

ADA-V

21-09-2005, 06:34 AM

Sheeat! I realise i'm an old bugger but my first house cost me £12000 and I thought i'd never pay it off!
My current house cost me 40k and is now all payed for. It's now worth £250000 ish, .

bloody hell, mate, which part of telford do you live in? punta verdi drive??

my olds house was 13k when they bought it. (15 years or so ago)

had it valued about 12 months ago at 78k. its a mad mad world.

danuk

21-09-2005, 05:08 PM

But surely by paying half of the mortgage AND a rent payment every month, it won't FEEL like having a property at half the cost every month.

Is the rent portion cheap and subsidised?

Yes, the rent on £55000 is around £160 a month.

It just gives people who could never afford their own place a chance.

You will be struggling to find a terrace house round here for £95000.

Riven

25-09-2005, 07:28 PM

sounds like an excellent deal then for a place, go for it,

Well we've gone for it!!!!!! :Cool2:

Exchange in 28 days and completion in December/Jan when the house is finished (we spent 3 hours yesterday, with the agent, choosing tiles, paint shades etc... ;) )

Andy

25-09-2005, 07:35 PM

Well we've gone for it!!!!!! :Cool2:

Exchange in 28 days and completion in December/Jan when the house is finished (we spent 3 hours yesterday, with the agent, choosing tiles, paint shades etc... ;) )

excellent,

congratulations hope your happy there :up:

:beer:

Riven

25-09-2005, 08:02 PM

excellent,

congratulations hope your happy there :up:

:beer:

Thaks Andy :Cool2:

I am sure we will be. We are a bit excited at the moment as you can probably imagine!! :D

Trish

25-09-2005, 08:05 PM

Riven

25-09-2005, 08:36 PM

Nice one :Cool2: Is it still on the island?
No, but if you threw a stone it would land on the island :lmao:

It's at Iwade

Trish

25-09-2005, 08:39 PM

No, but if you threw a stone it would land on the island :lmao:

It's at Iwade

Not far at all then :Cool2:

stuboy

25-09-2005, 08:49 PM

ahh you finally upgrading from the island!!!

good luck mate double garage and long drive!!

Riven

25-09-2005, 08:59 PM

ahh you finally upgrading from the island!!!

good luck mate double garage and long drive!!

Single garage and longish drive!! and 3 loo's :eh

There is only 2 of us, we wont know where to pee first!! :lmao:

stuboy

25-09-2005, 09:10 PM

1 4 11's
1 4 2's
1 4 chuck ups!!

Riven

25-09-2005, 09:14 PM

1 4 11's
1 4 2's
1 4 chuck ups!!

:lmao: :Cool2:

Dan Gliballs

26-09-2005, 12:15 AM

Nice one Riven, sounds like a good decision :)

Riven

27-09-2005, 10:33 PM

Nice one Riven, sounds like a good decision :)
Thanks Paul

We hope so!! ;)

Rich Cav V6

27-09-2005, 10:34 PM

Well done mate, wish it was that quick to sell a place........

Jacko lah

28-09-2005, 12:29 PM

We do not rent the 25% share of the property but the builder will take 25% of the purchase price when we eventually decide to sell.

this does sound a little to good to be true!!

Okay that's fine, usually there is a nominal rent on the shared bit. Many Housing associations do shared ownership, I suggest you contact a few and get advice.

The Only Issue I'd have is: It's easy to work out 25% when you sell it, but what if you eventually decide that you want to buy the 25% yourself (why would you - there's no rent). How do you agree what the figure is. Say you've spent 10K on the garden, and the house price is higher because it's really nice, will the builder share in your hard work. I suppose it works the otherway. You could decorate in a hiddeous green and get less for it.

Also (and I said only) : What if you want to extend, modify, improve the house. Will the Builder require you to get his agreement. We bought a new house and there was a restrictive covenent that we could not alter the outside without the builders permission for 3 years. Basically this was to stop us stone cladding it, and putting buyers of his other properties off.

Riven

07-11-2005, 09:53 PM

UPDATE

We exchanged contracts just over a week ago and today we have been told that our completion date will be 2nd December:bananasmi

So all we have to do now is come up with thousands of pounds :eh (Stamp duty Solicitors fees etc..) and talk to the water,gas,leky,tele people..:Cool2:

Tiggerz_SRi

07-11-2005, 10:06 PM

well in mate, wish they did summi tlike that round here! I cant afford to buy and cant see ever being able to!

Dan Gliballs

07-11-2005, 10:19 PM

Nice one Riven, you'll be well in for Christmas then :)

All brand spanking new aswell :cool:

Riven

08-11-2005, 10:37 PM

Nice one Riven, you'll be well in for Christmas then :)

All brand spanking new aswell :cool:

:D :Cool2:

Andy

08-11-2005, 10:43 PM

UPDATE

We exchanged contracts just over a week ago and today we have been told that our completion date will be 2nd December:bananasmi

exactly the same as me,
moving on the 2nd of december,

congrats, hope all goes well for u and enjoy your new place, i know i cant wait to get in mine (although is only a flat) just trying to sort out delivery of the sofa/fridge/washing machine etc. dort out the phone/broadband/TV etc. alot to sort but will be worth it,

:up:

Riven

08-11-2005, 10:54 PM

exactly the same as me,
moving on the 2nd of december,

congrats, hope all goes well for u and enjoy your new place, i know i cant wait to get in mine (although is only a flat) just trying to sort out delivery of the sofa/fridge/washing machine etc. dort out the phone/broadband/TV etc. alot to sort but will be worth it,

:up:

Congratulations to you to and good luck with all the paperwork!! lol!!

sweetchariot0_3

08-11-2005, 10:55 PM

i'm looking into a key worker scheme much the same thing.
2 options
option 1 is an equity loan at 0% upto a maximum of 40k
way it works is, say you borrowed 40 k and the house was 160k. ie a quater of what the house was worth.
you pay nothing on the loan until you stop beinga key worker or if you sell up then you would repay the quater of what your property was worth.

option 2 is part buy part rent,with a buy back option on the rentle part of the property

Andy

08-11-2005, 10:56 PM

Congratulations to you to and good luck with all the paperwork!! lol!!

lol...
all seems to be sorted actually, got the mortgage papers in the post signed them and sent them back, went to the solicitors signed 4 times walked out and got a letter today saying to collect the keys after 1pm on 2/12/05 from the estate agents, and thats it....

im sure there must be more tho....

good luck,

Dan Gliballs

08-11-2005, 10:59 PM

Buy a filing cabinet each.....................you'll need it!!! :D

Riven

08-11-2005, 10:59 PM