Anyone understand part-buy/part-rent?

There is an older person shared ownership for over 55. Weeks nice 75% isnowned rent is no longer payable on the remaining share.

A lady who worked beside me did this. I have to admit, she said never again and wished that she had saved up and put a deposit together for a house that was wholly her own, or just continued to rent. Im afraid I dont know the ins and outs of why, but it was something to do with losing money on it.

My friend bought a house this way.
She had thought that she would be able to pay off the balance after 5 years.(in 2 years time) However her house has gone up in value.
This may be thought to be a good thing but it also means that the ‘borrowed bit’ has also gone up. Now she is afraid she may not be able to afford it and may have to sell. She is 65 so probably wouldn’t get a mortgage.
The positive thing for her is that she will be able to afford a house away from the coast and her work. Luckily she will be able to get her pension then but she really did want to stay near her work and friends.

My understanding is her rent increases with inflation . I dont know the answers to the probate questions.

Is there any protection regarding the rent you pay on the percentage you don’t own?

There are some suspiciously cheap ones in a very pretty village near me, but there is no information about any of that, which worries me. If the owners can increase the rent after purchase, it could become unaffordable, leaving people in difficulties.

I’m not in the market myself; but the ones I’m talking about look too good to be true.

Is there money set aside for him to meet the maintenance obligations during probate and the probably lengthy sale?

And what happens during probate if he isnt allowed to sublet it and also isnt allowed to leave it vacant.

He may be inheriting an expensive headache!

But it will still need to be sold on her death presumably so the problems such as not being allowed to chose your estate agent etc still arrise?

My friend has one. She had a 70% share and pays rent on the 30% she doesn’t own around £100 a month. She is in her sixties and as it will be her last house when she dies they take back the percentage she owes and her two children get the rest as inheritance when it is sold. Her son is named as executor so will sort out all the legal stuff. Perhaps it is more complicated if you want to move again but she doesn’t

The only benefit is that you cant be asked to move every 6 months. On the downside, you really are a bit stuck there.

Its like timeshare/equity release... go into it knowing you'll prob loose money so long as it has other benefits for you

So none were able to use them as a stepping stone due to the difficulties and big losses they faced when selling. One even had to borrow money from family just to get out and walk away from it!

They are often built/designed as "starter homes" rather than homes that can grow with a family long term. Okay for a young couple and maybe a small baby but people out grow them and then struggle to move. You are also in trouble if you need to move locations quickly for work or family etc.

"rented".

Nope. I know several people who did it and ended up so much worse off when they had to move on, losing all the equity they had paid off and more (so deposit gone, back to square one with nothing).

All had to go back to rentes because of the massive losses they had to absorb when they came to sell.

It seems an easy way to get onto the property ladder but check the T&Cs and maintenance agreement. In particular check what charges or restrictions apply if you need to sell, you could get a nasty shock.

I was unsure about shared ownership also but my daughter showed me a website that helps explain it easier.

propertybooking.co.uk/shared-ownership-explained

I hope this helps

Thank you, everyone. That is all very helpful.

It is a great way to get a foot on the ladder and you can buy different proportions of a property depending on your circumstances. see: www.sharetobuy.com/properties/

Do read the T & Cs very carefully though because in some cases if you make improvements the housing association owns their proportion of the improvements if you sell. This does not apply to a relative in NI though. It usually costs more to sell up than with a normal property.

Once in your shared ownership home you can 'staircase' which means buying a further share in the property. When doing so you need to take into account the legal costs associated.

It's a common arrangement in "affordable" housing. Check the tems and conditions; sometimes the householder has to pay for all the maintenance/improvements even though they only own a proportion of the property.

Basically you buy part value of house and pay rent to the company (housing association etc) that owns the rest. So you have mortgage for your part. £150,000 house you would need £75,000 mortgage for half share, which is probably most common start point.
You will have to pay part of any work they decided to do.

This shared ownership guide explains how it works and who is eligible.

www.sharetobuy.com/guides-and-faqs/what-is-shared-ownership/