Good point Diane, I guess this applies to all purchases not only Shared Ownership – Do you own research and not pay the premium just because it’s a new build or because you like this particular property.

I guess the people you know who lost money in shared ownership because of values declining locally would’ve probably lost money anyway were they forced to sell in the open market. If there are not willing buyers for overpriced assets, the only way is to sell for less. The only alternative is to hold it until it appreciates.

Freehold is always better, but there are only so many freeholds you can buy with a 2.5% deposit.

Overall, I think there’s a lot of value in shared ownership and much lower ongoing costs as the example above suggests. I know people who benefited greatly from it and I’d not apply a blanket rule but see it on a case-by-case basis.

It is an interesting article, however, there is a down side- when you come to sell. In some areas of the country outside of London and South East, Shared ownership homes are being sold for less that the original price due to being overpriced in the beginning or values declining locally. I know of a couple of people who have sold their 50% portion and have lost up to £40K. The other issue is if you want to leave the property and cannot sell for any reason, the housing associations who manage these types of properties have a clause which says you cannot rent the property. A lot of people do but know they won’t get permission. The Housing Associations can create new rules, for example, you cannot have a mat or plant pot outside your door on a open walkway where there was plenty of room!
As tenant/owner, you have few rights, the balance resides with the managing association. Owners will also pay for extra rubbish to be taken away and other issues the HA can think off.
I am sure this is all covered in the contracts but no one has the money to contest any of this. When people ask me about buying a shared ownership property, I tend to divert them to saving to get a freehold property.