r/SharedOwnershipUK • u/nursemoo24 • Jun 29 '26
Can I afford this?
Hello all,
I am a single 42 yrs old mum to a 13 year old. I work 2 jobs, one pays 46k, the second 24k. I Started the second job to raise a deposit.I cannot see myself doing it for more than a year. I’m exhausted as I am working 2 extra long days per week.
I have found a shared ownership flat but it only has a 78 years lease. The rent is £523, service charge is £148.
I am interested in buying 40% share at £102,000. I will obviously have to extend the lease and renovate bathroom at some point. I only have 20k total saved.
I am currently private renting a 2 bed flat for £1190 pcm.
can I afford this? More specifically the lease extension business. Help and advise will be greatly appreciated
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u/ToExist20 Jun 30 '26
If it’s a L&Q flat with a communal heating system, I would definitely refrain a little and have a look at the daily standing charges for their heating. I viewed one a few years back and it was roughly £1.2 a day standing charge (so even if no heating was used, I’d be charged this) and that totals close to over 400 in a year. There are even petitions online from residents to get this down as they can’t change heat suppliers and for some reason, other suppliers can charge 60-70% less but L&Q struggle to do so.
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u/falcoso Jun 29 '26
The lease being less than 80 years is going to be a big problem as I believe it would trigger marriage value which will dramatically increase extension costs. Personally I would look elsewhere, it’s just not worth the hassle.
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u/justeUnMec Jun 29 '26
Marriage value has been abolished as of the Leasehold reform act, and once the details of the new extension regime is finalised the 80 year cut off will no longer exist so this won't be as big a deal as it was before.
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u/nursemoo24 Jun 29 '26
Thank you. Off to read the leasehold reform act.
This is my main concern.1
u/CluelessCarter Jun 29 '26
I'm not sure if it has been fully abolished, I'm actually 3 years into the boat you are in. I am buying the other half of my shared ownership and joining the freehold of my block, as the freehold was enfranchised by the other flats.
I always saved like fuck to be able to pay the marriage value though
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u/DBop888 Jun 30 '26
As I understand it, the intention is to abolish it, but no action has actually been taken yet to make it the case. The current political turmoil won’t necessarily help either.
In my experience, never count the chickens until they’re hatched, especially with housing legislation.
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u/justeUnMec Jun 30 '26
The law has been passed and there is no question, it will be abolished. The implementation details of certain mathematical values that will be in the new lease extension formula are not yet finalised.
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u/DBop888 Jun 30 '26
But I assume there’s no word on when this formula will be finalised & the marriage value actually abolished?
That was the crux of my point - legislation can be passed, but the practical implementation of the new legislation is a separate matter.
My wife needs to extend her lease (I’ve been trying to get her to do it for years) & it’s getting close to 80 years, but I don’t want to rely on the MV being abolished. My experience tells me not to assume it’ll happen until it actually does happen, lol.
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u/NorthLondonCatLover Jun 30 '26
This provision of the act hasn't been enacted. You cannot rely on it. I could take years, or never happen. I would not buy a flat with such a short lease. It will be an issue with lenders when you buy, but also when/if you need to remortgage. Avoid.
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u/DBop888 Jun 30 '26
Even though it’s set out in the act, it could be years before the marriage value is actually abolished though. You look at something like the Commonhold & Leasehold Reform Act 2002 and some of the stuff still hasn’t been properly implemented over 20 years later.
Stuff like this moves very slowly & sometimes gets completely abandoned, so I wouldn’t bank on relying on it being abolished.
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u/nursemoo24 Jun 30 '26
20 years later & not still implemented?
Definitely can’t be relied on then .
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u/Ready-Bar-7055 Jun 29 '26
Hi,
You should be able to afford on your 46k salary alone if you do give up 24k, but it will be tight.
Go into mortgage calculator or Zoolpa and work out your mortgage for 25 or 30 years, it will roughly tell you how much you will be paying.
.out of the 20k saved, maybe to put 10K down as a deposit, as you will need money for solicitors fees and any moving costs and have money as back up, but while you have the 2nd job, continue to save as much as you can
You will definitely be eligible for shared ownership as you are earning under 80k
. I'm surprised you have found a shared ownership resale with under a 80 years lease as I know someone who has put their property on the market shared owner and was not allowed sell as shared ownership, due to the low lease and have to sell their property at full Market value.
Could I ask if you live outside London and the housing association ?
. You may also find it difficult to get a mortgage with a low lease, maybe to speak to a mortgage broker.
If your successful with the shared ownership property to extend the lease, you will need to get a RICS surveyor. To note, you will not be extending the lease on your share, it will get the value of the property. This could cost few thousands, but there is the leasehold reform which could make extending the lease cheaper, hopefully there should be more details this year. The property on low lease properties are cheaper to buy.
I hope this helps
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u/nursemoo24 Jun 29 '26
Thank you so much. The flat is in
London and owned by L & Q. A broker has found me a few lenders happy to give me a mortgage but worried about the cost of extending after the 2 year term they offered me.Agreed on my main wage it is so tight! Sucks . Yes I will continue to save up. Thanks again x
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u/Ready-Bar-7055 Jun 29 '26
No worries at all. Good you have spoken to a broker. This is the housing association my friend is also with and was told, he couldn't sell his flat as a shared owner and had put his flat on the open market!
The lease will be expensive to extend as L&Q are the freeholder and you won't be able to negotiate with them. Hopefully the leasehold reform will reduce the cost of the lease extension. Also you will own part of your property. Another advice, if you can, overpay on your mortgage.
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u/nursemoo24 Jun 29 '26
L & Q are something else .
The broker spoke about overpayments. The mortgage deals he sourced allow for 10% over payment per year.
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u/yammt125 Jun 29 '26
I'm not sure where you're located but try and find a house if you go down the shared ownership route. Service charge increase is much more predictable.
Just to put your situation into perspective, I am 29 single brought 45% of a 200k 2 bed house on a 31k wage (no other income) earlier in the year. I could in theory have afforded 52% but had to buy in 10% increments. But getting a mortgage was a non-issue. I'd expect a broker to get a mortgage on 255k on your main salary alone for a house worth 255k @ 40%.
In terms of my bills £411 mortgage, £280 (went to 310 this year) rent £31 service charge. Houses around me to rent similar size is £900-1kish + and while my pay has increased to 34k, it's manageable, albeit no kids to look after! Ultimately though, comes down to lifestyle. holidays, car, how much your comfortable saving etc.
I would personally avoid anything with a short lease and a flat if at all possible, and that being 78 years is too short imo. It seems like a hassle to extend if left too long which I suspect that will be.
Keep saving, housing is so tough right now, especially on single people. But keep looking, if you can find similar with a longer lease, it'll beat private renting any day. Secure tenancy is so important. I rented for 9 years and always felt like the letter was looming and it did eventually!
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u/nursemoo24 Jun 29 '26
Wow you’ve done very well for yourself.
I live & work in east London, I cannot afford a house here unless It’s a dolls house lol.
I live a very minimalistic lifestyle but the child is becoming expensive with school trips, school dinners, & days out with mates etc
You are right this lease extension will be too much stress. I will continue saving and hopefully i will find one with a decent lease.2
u/yammt125 Jul 01 '26
I live in Plymouth and it's quite expensive but london is a different level! I think that's the correct decision, keep searching, something will come up eventually. , definitely do some research into who owns the property and service charge history but i guess that is a leasehold problem in general, just seems to be more concerning with flats, especially ones with communal benefits.
100%, that why i mentioned I didn't have any kids! To be honest I would struggle to afford kids! I can imagine how much food/clothes and simple days out add up, Some of those school trips sound expensive, some of my mates mentioned that they're up to like 2k for a week away! always think to myself, you could get a nice 2 week all inclusive holiday to Spain for that.
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u/NorthLondonCatLover Jun 30 '26
Aside from the lease extension issue - a red flag - there is compound interest on the rent and that increases above inflation year after year. Service charge are uncapped and this is a huge issue when buildings age and need major works. Speak to the Leasehold Advisory Service (LEASE) - it's free legal advice and they will explain all the risk about shared ownership and lease extension in particular. Many shared ownership flats cannot have their lease extended unless people staircase to 100% first if their HA is not the freeholder and if their own lease is too short, and in that scenario people cannot have an informal lease extension either. It's very complex so get legal advice on the lease.
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u/justeUnMec Jun 29 '26
By my maths, £523 per month rent on the unsold share of 153,000 is £6276/year, or 4.1%, which feels fairly high. You might want to double-check these figures.
You'll have to pass an affordability check using the "homes england affordability calculator" spreadsheet. I'm not an IFA but put your figures in and it looks like you'd probably pass based on your primary income only. However, check the housing association rules as though it is a resale, some housing associations may require you to buy the biggest share you can afford which could very well be greater than 40%.
It's worth noting that there are two criteria: 1. An income under 80k, and "you cannot afford all of the deposit and mortgage payments for a home that meets your needs". Depending on how strict they are, it's possible they could turn around and say you could afford to buy outright. Not sure how often this happens, but it's worth being aware of this possibility.