I am looking into Shared Ownership as a last resort now that house prices have risen above and beyond the reach of your 'average' first time buyer. My partner and I are both Graduates, earning an average salary, which is not enough to raise a mortgage for a property in today's market (well, certainly not without a £35,000 deposit!). In looking at the Shared Ownership available, we have been met with huge (and I mean up to four year) waiting lists, or properties available on the open market through estate agents. However, these properties usually attract a 'premium'. This is a variable amount of money which the owner tags onto the price in lieu of leaving the 'fixtures and fittings' behind. Housing Associations do not approve of the premiums that people place on their properties and this is why they are for sale on the open market (and not reallocated through the association). Improvements These 'premiums' are allegedly to cover the 'improvements' made to a property over the time that the vendor has lived there. This is because a shared ownership property - when new - comes as a shell. There are no 'perks' to a brand new house that you would normally be able to negotiate, due to the demand for them. Put simply, if you're not prepared to carpet, install light fittings, kitchen appliances (eg cooker), and set the house up; then someone else will be prepared to. However, the premiums placed on properties are often above and beyond the value of the 'improvements' made. I have encountered 50% shared ownership properties for sale with premiums as high as £25,000. You are unable to add this premium to your mortgage, as it is considered above the value of the house/flat by your mortgage provider. So where does it come from? Extra loans The simple answer is that you either have to save, or take out a loan. I do not know of one would-be shared ownership purchaser who could afford as much as £25,000 (the average is £10,000). If you have £10,000 to place down as a premium, I would argue that you're more likely to be able to place that sort of money down as a hefty deposit on a house and buy outright. The premium situation needs to be looked at by the government and abolished; certainly for first time buyers of shared ownership houses. Until that happens, I'm stuck on a four year waiting list, praying for property prices to fall to allow me to step onto that precious ladder. Read other case studies >>
Have you had problems getting on the property ladder? Have you just got on it? If so, how did you manage it? Do you want to upgrade but will have to move away from the area to do so? Tell us your experiences using the form below. 
| Andrea, Milton Keynes | Wednesday, 16-Feb-2005 11:48:00 GMT |  | | As a single woman, first time buyer - I am finding it impossible to get onto the property ladder. Shared Ownership schemes are a scam. There has to be a fairer way of first time buyers getting on the ladder? or I will be renting for many more years with no opportunity to invest for my future in property. |
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