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Shared Ownership- HELP!!

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  • Shared Ownership- HELP!!

    Me and my partner are currently trying to get a newbuild shared ownerhip property. We are first time buyers and like alot of people, cant afford to buy a property so shared ownership seemed perfect.

    We have found the one we want, have been approved by the housing association and have been told that our finances all work out etc.
    We are viewing the place again on saturday and have been asked to put a "reservation fee" down which i assume is normal?
    The only problem is, we were told we would need between £2000-£4000 for all the legal bits and bobs, so we have managed to get this (took a while!) and so we felt happy it would all go through fine.
    My partner just spoke to the estate agent, and he's now said that we have to have a 5% deposit as well (which will be around £5000!) this was never mentioned before!
    I thought that one of the main benefits of shared ownership was that no deposit was required- just the legal bits, stamp duty etc!

    Can anyone PLEASE help me, i dont know if this is normal practice (if so, i dont know why ive never heard it before on any property ive looked at!)
    Im just worried that because its quite obvious we dont know hardly anything about property that we are being taken for a ride?

    Any advice would be so appreciated,
    Thank you!

  • #2
    My partner just spoke to the estate agent, and he's now said that we have to have a 5% deposit as well (which will be around £5000!) this was never mentioned before!
    With all this preparation etc have you not investigated getting a mortgage? Whether or not you need a 5% deposit depends on whether ther are any lenders out there now that will lend 100% of the price you are actually paying for a SO property.
    RICHARD WEBSTERwww.rwco.co.uk
    As a conveyancing solicitor I want to be helpful (England/Wales only) but can't accept liability for this.


    • #3
      There are lenders out there who will lend 100% of the share of the property being purchased in shared ownership cases.

      Speak to a good independent mortgage broker for advice on that one.

      As for the deposit, in my experience this has not been the case. As Richard quite rightly points out, the deposit required for the purchase is generally down to the mortgage lender. However, it is feasible that the vendor requires a deposit in order for you to secure the property. I am not sure if that is the case here or ever, and it would seem rather silly as if people had deposits then in general I would assume they would not want a shared ownership property.

      Clarify with the estate agent exactly what they mean by "you will need a 5% deposit" and whether they want that upfront or mean you will need it for the mortgage.

      If they say you will need it for the mortgage then it makes me think you are using a mortgage broker who works for the estate agent and therefore I would suggest you tell them you want to use your own broker as a good broker will be able to find you a deal whereby you don't need a deposit.