Randomfry Posted February 7, 2009 Share Posted February 7, 2009 I've just found a flat i like the look of (first time buyer). Just wondered if someone could explain the ins and outs of a part own part rent scheme. It's a 40% share so does that mean when i come to sell they get the remaining percentage? Thanks guys Quote Link to comment Share on other sites More sharing options...
Sarnie Posted February 7, 2009 Share Posted February 7, 2009 Yes. Quote Link to comment Share on other sites More sharing options...
Adriank Posted February 7, 2009 Share Posted February 7, 2009 I've just found a flat i like the look of (first time buyer). Just wondered if someone could explain the ins and outs of a part own part rent scheme. It's a 40% share so does that mean when i come to sell they get the remaining percentage? Thanks guys Sounds like you know what your on about ! Quote Link to comment Share on other sites More sharing options...
Randomfry Posted February 7, 2009 Author Share Posted February 7, 2009 There's the option to buy the property for the full amount. If i can stretch to that financially am i better off doing that? Quote Link to comment Share on other sites More sharing options...
Sarnie Posted February 7, 2009 Share Posted February 7, 2009 There's the option to buy the property for the full amount. If i can stretch to that financially am i better off doing that? Maybe. If you buy 100% of the property: If the property appreciates, then you gain the full amount it increases. If it depreciates ( like they are now) then you take the full loss' yourself. If you only buy 40 %: When the property appreciates you make money but not as much as if you owned the full property. if the property price depreciates then you have limited exposure to the losses as you only own 40% of the property. The other thing to think about is that the cost to buy the remaining 60% at the moment may be, for example, £60k. In 2 or 3 years time when you want to buy the other 60%, depending on how the market has changed in that time, the remaing 60% might be £40k or £80k etc etc..... you will need to pay rent on the 60% of the property that the housing association own. Make sure the total payment of the rent plus your mortgage does not equate to what it would cost you to buy 100% of the property. Quote Link to comment Share on other sites More sharing options...
Randomfry Posted February 7, 2009 Author Share Posted February 7, 2009 Thanks Liam that's a big help. Now i just need to be able to see into the future so i can see what the house markets gonna do Quote Link to comment Share on other sites More sharing options...
Sarnie Posted February 7, 2009 Share Posted February 7, 2009 Thanks Liam that's a big help. Now i just need to be able to see into the future so i can see what the house markets gonna do Join the club............ Quote Link to comment Share on other sites More sharing options...
Cara Posted February 8, 2009 Share Posted February 8, 2009 I am dealing with this more and more, it's becoming so much more popular considering the downturn in the housing market. You would have a mortgage over X% and paying rent over the remaining X%. Come selling up time, you would get your percentage share of the profit, and so would the housing association (and so would they have veto over the acceptable selling price). Lots of 'ins and outs' - which I can't really be bothered going into after having several drinks tonight I'd be happy to answer any questions though. I'd presume the Scottish law position would be much the same as the English law position here. Quote Link to comment Share on other sites More sharing options...
Randomfry Posted February 8, 2009 Author Share Posted February 8, 2009 I'm hoping to do no morgage and part rent or owning it and having a morgage really as i have a decent deposit. Quote Link to comment Share on other sites More sharing options...
lotuscc Posted February 8, 2009 Share Posted February 8, 2009 House prices are likely to fall further. Barclays have said 15 % this year. This is what the IMF said in Oct 08: The International Monetary Fund (IMF) became the latest body to predict a recession in the UK, when it radically downgraded its forecasts for British economic growth yesterday, and declared house prices 20 to 30 per cent overvalued. Might be costly to get into the market too soon. Quote Link to comment Share on other sites More sharing options...
rtbiscuit Posted February 8, 2009 Share Posted February 8, 2009 We bought last June even though we knew the Market was falling. But we have stretched our selves and bought a 4 bed house so that we don't have to move for at least 10 years. That way the Market can do what it pleases and should hopefully returned to normal by the time we look at moving. It's not worth buying for short term investment or if you plan to move in 5 years. People will always need to move regardless of time and the. Market. If you need to move then find the best property for a long term. Or. Buy a property that has the potential to add value. By extending it. The Market has dropped by about 15% so far and is probably likely to fall a other 5 or 10%. Just reMember that if you can get a Mortgage on a low rate. Your will only have it for a set time. And by the time you come to renew the interest rates will have gone up and your mortgage will go up by several 100 pounds a month. And some people won't be able to cope with that increase Quote Link to comment Share on other sites More sharing options...
Sarnie Posted February 8, 2009 Share Posted February 8, 2009 Might be costly to get into the market too soon. Only if you intended to sell within 12-18 months. Quote Link to comment Share on other sites More sharing options...
Sarnie Posted February 8, 2009 Share Posted February 8, 2009 And by the time you come to renew the interest rates will have gone up and your mortgage will go up by several 100 pounds a month. And some people won't be able to cope with that increase Incorrect. Rates can come down too. Quote Link to comment Share on other sites More sharing options...
Randomfry Posted February 8, 2009 Author Share Posted February 8, 2009 Hmm i knew i should of bought a delorean instead of a 350. Lol. If i bought it i wouldn't plan on moving for a while. I was suprised when i was looking around the estate agents that the prices haven't fallen further. But maybe that's the area i live in. Quote Link to comment Share on other sites More sharing options...
rtbiscuit Posted February 8, 2009 Share Posted February 8, 2009 And by the time you come to renew the interest rates will have gone up and your mortgage will go up by several 100 pounds a month. And some people won't be able to cope with that increase Incorrect. Rates can come down too. Agreed, but while In the bank yesterday I asked about current mortgage rates which are at about 4%. Which is pretty low. At so E point they are going to go up. And if your caught out either at renewal time or on a variable Mortgage you could come unstuck. Sarnie I don't know if you agree but if getting a mortgage if you can get a really low %. Then try and lock yourself into it for as long as possible. And save on the side to make a lump sum payoff later on. Or to subsidize you for later if the rates go up. Quote Link to comment Share on other sites More sharing options...
Sarnie Posted February 8, 2009 Share Posted February 8, 2009 And by the time you come to renew the interest rates will have gone up and your mortgage will go up by several 100 pounds a month. And some people won't be able to cope with that increase Incorrect. Rates can come down too. Agreed, but while In the bank yesterday I asked about current mortgage rates which are at about 4%. Which is pretty low. At so E point they are going to go up. And if your caught out either at renewal time or on a variable Mortgage you could come unstuck. Still not neccessarily true. The base rate at the moment is 1%, decent rates are at about 4%, thats a 3% difference. A few years ago I did a lot of deals sub 4% even though the base rate was nearly 5% at the time. The difference now is that a few years ago lenders were prepared to make next to nothing on your mortgage for the first few years and then make the money when your rate went up. The total lack of confidence in the market has led to a complete reversal of this trend but it could come back in the next 12-18 months, so theoretically the base rate could go back up to 4% or 5% but if the economy has recovered there could be products sub 4%. Just because the base rate goes up doesn't mean rates will. Quote Link to comment Share on other sites More sharing options...
drewbie Posted February 8, 2009 Share Posted February 8, 2009 Sarnie as always talks a lot of sense. However, whilst in principle it could go back to how it was, I severely doubt it. Your right of course that the economy has had 'hic-ups' and re-alignments after which it goes back to how it was. But the crazy under BoE lending rates as well as 5x salary loans and 120% loans were something very new in the extent they were available and to how many. It was a crazt time that has now led to the City suffering a complete kicking, not just a hic-up or adjustment. So this time I don't think things will get back to were they were 18 months ago. We'll go back to sensible lending to sensible people at sensible rates. And let's not forget the banks will also start having to make money from mortgages and savings. The very easy money banks could get hold led them to being a bit bullish. Money will cost them more in future even when it does start to become widely available. Quote Link to comment Share on other sites More sharing options...
Sarnie Posted February 8, 2009 Share Posted February 8, 2009 I think those days and those products will all be back available towards the end of this year, however I think the lenders will have learnt from this and will become much more frugal in who (and the associated risk attached to them) they actually give their money out to. I have done dozens of mortgages and you look at the income figures, their credit score and what they want to borrow and you know full well they can't afford it. But if the bank says it fits and the client says they want it, its not my place to tell them otherwise. All i can do is document to my compliance team that I have done my job perfectly. Quote Link to comment Share on other sites More sharing options...
Stew Posted February 10, 2009 Share Posted February 10, 2009 One more thing that I didn't see mentioned is that if or when you decide to sell your % of the property, the housing association has 'first dibs' on it based on their valuation..... Quote Link to comment Share on other sites More sharing options...
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