“When I bought the first share in my flat in 2013 I had no idea how leasehold worked, let alone shared ownership”.
If you want to buy a flat in London, leasehold is the only option. I was renting when a two-bedroom shared ownership flat came up a couple of streets away. Monthly costs seemed to be around the same as renting my one-bedroom flat, so I saw no reason to not do it. I staircased to 50% 4 or 5 years ago (the maximum I could afford at the time). Then my partner moved in with me. I added him to the lease, which meant we could jointly afford to staircase to 100% last year.
When I bought my first share service charges were advertised as £170pcm, and the last few years it’s been roughly £240pcm (touch wood). But one year there were extra costs amounting to around £1,000.
If I was doing it again I’d go for a flat in a smaller, older-style building. A Victorian house conversion would probably be better quality. We’ve had various defects, leaks and other problems which you shouldn’t really have in a new-build property, and the NHBC warranty doesn’t appear to cover much.
The housing association are still involved even though the head lease was sold on to a private entity. And my service charges are higher than some of my neighbours who aren’t shared owners because I have to pay a management fee to the housing association on top of the other charges. Another difference between shared owners and private leaseholders in our development is that flats in our block were sold with 125-year leases, but private flats in a block built more recently had 250-year leases.
We’d like to move somewhere with more space, ideally with a garden.
But we’ve just discovered we’ve got cladding issues. We had an EWS1 form come back recently with a B2 rating (meaning there isn’t an adequate standard of fire safety and remedial work and/or interim measures are required). We’re still within the ten-year building warranty period so we’re hoping that either the NHBC building warranty will pay out, or the Building Safety Fund. But the problem is that the B2 rating isn’t for the cladding itself; it’s what’s underneath the cladding. Communication from the housing association has been limited in the last few years since Grenfell. So I don’t really know what’s going to happen.
The glossy professional brochures make new-build shared ownership flats seem very desirable. They do a very good job of selling this dream of shared ownership. But the name ‘shared ownership’ is a misnomer; it’s mis-advertising. Ultimately you’re still just a renter, and you’re liable for all the costs whether you’ve staircased to 100% or not.
To start off with, I thought it was a good thing to get on the housing ladder. Having some equity is financially much better than just renting. I think that makes sense. But liability for remediation costs could wipe out all our equity. I’ve seen on social media that lots of people are worried about losing their equity, or even going into negative equity.
Name changed to protect anonymity.