Shared ownership 75%....can I do it?

Question

Hi,
I have found a brand new 2bedroom flat in upminster, Essex. It is up for sale at £150,000 (75% ownership) on top of that they are asking for £100 rent per month towards the last 25%.
I think this still seems really cheap as the location and the quality of the flat are 1st class.
They were on the market orignally to be sold outright for £250,000 but they havent been sold???!?!?!

Also is it in my league? I earn £21,000 a year and have £5,000 savings.

I am considering it as a buy to let as I am only 20 and life at home is still far to comfortable!

Any advise would be great.

Answer 1

1. on your salary you can only borrow £95,000 MAX.

2. you could not rent it out as the remaing 25% of the property will be held as effectively a second charge on the property behind the mortgage, both of which will have covenants to not rent the property out.

3. buy to let mortgages have a minimum deposit of 10%

4. not alot of lenders allow shared owenership mortgages

sorry to be negative, but you should know the facts before wasting anymore time on your project

Answer 2

You probably can afford this but it's a matter of whether it's a good idea. Here are the options;

Repayment mortgage: This is the most sensible option when buying a house as some of the amount you borrow as well as the interest is paid off. On an interest rate of 5.3% that would be £903 for a 25 year mortgage.

Interest only: You pay the interest only and the borrowed amount never goes down. This would cost £662 over the same period and rate.

Both of these are without the extra £100 rent you would need to pay plus all your council tax, utilities etc which you will need to figure out.

Not sure how much 21k is per month but this would all probably be a bit of a squeeze. Only other thing I have heard about these sorts of property is that some associations which run these schemes require you to sell it back to them when you move on meaning that you will only get their valuation on the property and not necessaryily the market value.

Answer 3

My husband and that i began out our shared owenership 3 weeks in the past. experts: you're no longer spending a fortune on hire without return, we've foundthat the loan and hire blended is under we've been paying merely to hire a matching sized residing house earlier and a minimum of this form as quickly as we sell we get some money decrease back. you have the liberty to beautify as you like you do no longer could stretch to an entire one hundred% loan and not be waiting to arise with the money for to stay You (many times) provide you the choice to purchase the different share it fairly is a step up, in 5 or so years you are able to sell, optimistically make merely somewhat money from what it fee and optimistically you have saved up some extra moeny so so which you are able to purchase an entire residing house Cons: looking on who owns the different 0.5 you have issues- we very own 50% and 50% is owned via a housing association noted as Orbit who're an entire soreness to touch, they held up the sale approximately 4 circumstances and can charge an admin fee for each little thing! so which you could be very careful once you opt to flow a shared possession residing house isn't worth as much as a non shared possession residing house as there's a extra limited industry maximum shared possession properties are residences as housing institutions build the residences themselves(even nonetheless ours is a house) in my view i might say that for us it has worked somewhat nicely, i might of direction somewhat very own an entire residing house yet as quickly as we had offered a one hundred% share of a house it would have not been as spacious or as high-quality as the place we at the instant are.

Answer 4

I can't understand. What are you renting 75%? Do you plan to live here or rent it?

Answer 5

That seems entirely too expensive for your salary.

Answer 6

can you pay 10% deposit? even if you did still it will be expensive for the salary you earn.

Answer 7

advice yes leave it alone, well alone!!