The Daily Telegraph reports that 320,000 buyers have opted for shared ownership, but that many of them have seen their new purchases plummet in value.
High charges and an array of fees as well as 100% of leasehold service charges are blamed for the negative results of shared ownership. Interest rates on mortgages are also higher with shared ownership.
But with hundreds of thousands desperate to get out of renting the take-up has been huge.
The Telegraph claims 5.4% of homes for sale in Cambridge are shared ownership, adding that London, Birnmingham and, curiously, Plymouth also have high levels.
Savills predicts 150% rise in shared ownership as Help To Buy ends in 2023.
Marc von Grundherr, of Benham & Reeves estate agents, is quoted:
“There is no doubt that the banks are profiteering from those in a more desperate position trying to make it on to the property ladder and are charging much higher interest rates. This wholly unfair.
Fees involved in “staircasing” to higher levels of ownership are also are major concern.
The National Housing Federation, which represents housing associations, is looking at ways of reducing staircasing fees charged by its members.
The Telegraph cites an example in Bow, in east London, where a shared ownership flat has fallen from its original £500,000 valuation.
The purchaser paid £150,000 in 2014 for a 30% share.
When in 2017 he bought a further 15% stake the flat had fallen to £450,000, and now he was wanting to buy another 20%, but had received a valuation of £425,000.
“He now faces the choice of throwing more money into a flat that is decreasing in value, or selling up and taking a hit on the property,” write the Telegraph’s Adam Williams.
Selling can be difficult, however, with one selling with Benham & Reeves losing five buyers in 12 months as the freeholder / landlord took so long with the bureaucracy.
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