What they do not tell you about Shared Ownership

The promise of being able to afford our own home as property prices are reaching extortionate levels is a compelling one.  I too was lured by the temptation of shared ownership.  The shiny sparkling new build properties are hard to turn down but I strongly recommend you do a lot of research on your chosen Housing Association (HA) if you can't avoid them altogether.

All HAs are different and the scheme rules vary but make sure you ask the following.

What is the process for resale?
 I know you want to buy a home first before thinking about this but it's important.  I bought at the height of the house price rises just before the crash in 2007.  I was fixed into a high mortgage rate when others enjoyed the low rates.  When I enquired about selling I was shocked to be told I had to pay for a chartered surveyor to price it at a cost of £250 as the HA wouldn't accept an estate agent (who would have valued for free).  Incidentally the chartered surveyor informed me that they work on behalf of the HA and the valuation would be in their favour so I recommend you find your own.

When and how often does the rent increase?

I also didn't know that in spite of mortgage rates being low my rent portion (which was 70%) and service charge continued to increase year after year.

Can you Sublet?

I thought about moving back home and renting it out only I was not permitted too by the HA and then to add insult to injury because I had a two bedroom the bedroom tax came into play.  

Who is responsible for repairs?

I was also frustrated that my new build property was required to have some alterations to the vents due to a 'carbon monoxide incident' in another building.  As it was under NHBC I assumed this would cover it.  The service company who managed the building said as I owned 30% the onus was on me to pay it and only those who rented didn't have too.  Needless to say many angry words were exchanged.

When I did eventually sell three years later I had to hope that someone already in shared ownership was looking to upsize.  Once you are in the system it is difficult to get out and the euphoric haze of one day owning it outright starts to fade quickly and becomes unattainable when you face rent rise after rent rise.

If you do decide to go ahead and have satisfied yourself with the answers to these questions then make sure that whenever you get your service charge and rent statements that you check through them to see where your money was actually spent.  You are also entitled to ask for the accounts and to see receipts if you wish.

My advice would be to avoid these schemes if you can,  and save save save to buy outright.