“Compared with purchasing a freehold property, shared ownership is a terrible deal. But compared with the insecurity of renting, it is a good option and provides permanence and security. I am grateful for that.”
Starting over…
I didn’t expect to find myself starting again at the age of 52.
My generation was brought up on a rather cosy vision that the world runs smoothly, and we collect the rewards as we grow towards a happy retirement in our own home.
My father, a property developer, lost his own home when a deal went bad during the construction boom and bust years of the nineties. So when my marriage of 30 years ended and I realised I had to move on, I was clear about one thing… I wanted our children to retain access to their family home. Their roots.The place they grew up and would no doubt want to return to from time to time as they embarked on their own lives.
I did not contest the divorce and left with nothing. My partner (now ex) and I are still friends as a result.
That was eight years ago.
I’m happy in my home and adore the location
I have been in my shared ownership home for two years now and have no issues to report.
One interaction with the housing association, to report a problem in the road, was resolved within a matter of weeks.
I adore the location. The village has a shop, a pub, a cafe, and a community centre. I have a small garden and a spare room for my hobbies. I can cycle to work. I don’t need anything else.
But it took seven years of renting in not ideal situations to get here.
How I got into shared ownership
I encountered all the usual problems that come with the private rental market: short term tenancies, constant rent rises, unfairly kept deposits, and unfixed repairs.
It also took two failed attempts to purchase a shared ownership home due to the difficulties in navigating the complex clauses and peculiarities of shared ownership contracts.
The decision to go shared ownership was largely made for me; there was simply no other option.
There is no shortage of available properties in town and country. But with a starting price of £150K for a one-bed flat, they were all unaffordable to me.
With no deposit and only 13 years left to pay off a mortgage (mortgages only allow repayments up to the age of 70), my budget was around £100K. The increased payments, compounded by service charges and ground rents, made all property options unaffordable. Private rent is also now more than the cost of a mortgage, so as a semi-professional person, it was disheartening to find myself unable to afford a home.
Shared ownership gave me options. I was able to choose where I lived, as well as providing longer-term security than renting in the private sector.
What will happen when I retire?
What will happen when I retire, having paid off my 40% share, I am unsure. Hopefully, my pension will cover the rent.
There is no possibility of staircasing, and the freehold isn’t available to buy as a covenant protects the social housing status of the property. I am happy with this.
When I moved in, my neighbours enquired how I was eligible; they assumed shared ownership was to enable young families to get on the property ladder. That left an uncomfortable feeling, but as the house was on the market for over a year before I came along, I honestly don’t believe I am doing anyone out of a home.
It is also missing the point. We have to stop viewing property as a commodity.
During my life, we have seen the property carousel go full circle from working people not expecting to own a home through the bonanza years of home equity increase, and back to our children’s generation having little hope of owning a home other than through inheritance.
The difference now, though, is that rent is equally unaffordable and council housing is non-existent to most people.
Short-term rentals deny our right to make a place a home through permanence, the ability to decorate and furnish it without fear of having to move on. Equally, property speculation breaks up communities by creating a migratory population in search of the next deal.
I have come to realise that, compared with purchasing a freehold property, shared ownership is a terrible deal, but compared with the insecurity of renting, it is a good option. It provides permanence and security. I am grateful for that.
How do we improve SO?
One simple change would be to remove the ‘always-up’ annual RPI rent increase.
It makes the whole concept unsustainable.
Why is it necessary? Where did this idea come from?
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Additional Resources
Shared Ownership Resources: Initial rent: Q&A with Geoffrey Leaver Solicitors
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