Shared ownership online campaign

H

Hannah4

Registered User
Messages
3
There must be thousands of people out there unable to find a way out of the shared ownership trap. The annual rent increase is unsustainable for many people. in my opinion action is what is needed or change will not happen. How about an online campaign to bring about change?
 
Hi Hannah

Have you read this explanation of how it works?

How "shared ownership" works

In particular:

"It's a disgrace - the council is pushing up rents by 4.5% every year, although rents are falling everywhere else and the value of the property has fallen by 50%"
Because the "rent" is not actually rent, but is an ordinary mortgage repayment, it is not an extra cost to you, although it does affect your cashflow. The extra money you pay goes to paying off your "rental equity".

I would support a campaign to explain why Shared Ownership is great value for the people who got it and maybe make some changes to the terminology so that they appreciate it more. Perhaps there should be a reduction in repayments as well, although this will mean that it will take longer for you to pay off your mortgage.

Brendan
 
Brendan,

Are you certain your post above is factual. I have been repaying my "rent" to Cork CC for the past 10 years and the rental portion of my mortgage has not decreased. I have had correspondence with the council who have informed me that the lump sum will remain even after my mortgage on the rest of the property has cleared.
 
Hi JBM

"This thread relates to houses purchased after 1 January 2003 only."

If you took out your "shared ownership" after that, then it is factual. It took me huge amounts of research to understand and explain the system. Many council officials have no understanding of it. Words like "shared ownership" and "rent" are completely misleading.

Brendan
 
Brendan,

Yes I purchased in 2004. Thanks for the clarification. Did you find any documentation which supports this during your investigation or was it through conversations with the council. If so could you email it on please.

Thanks.
 
You will find links in the post.

Then read your contract carefully in the context that most of the names are misleading.

Brendan
 
Hi Brendan,
I read your section on Shared Ownership. Regarding the rental portion I received figures from the council which indicate that the rental portion of my mortgage will keep rising until the expiry date of the loan when it wlll reach 883 euro. I will still not own my property outright. This is not a good deal!
 
Hi Hannah4,
I've had a shared ownership mortgage with DCC since 2004 and have to admit I didn't understand it until I read Brendan's posts. Although the rent payable per month is increasing each year, the overall balance of the rented portion is decreasing. Do you receive year end balances from the council?
Brendan, I found your explanation invaluable in helping me understand. I have copies of all my year end balances if you would like me to send you through these so that you can use them as examples?
 
Couple of points about Brendans post. What you pay as rent really is rent, the amount does not decrease as Brendan suggests. It remains in full and must be cleared in full at the
end of the mortgage period if necessary by another mortgage.
Secondly the mortgage protection is only on the purchaser's share, not on the councils share
which makes it about 3 times as expensive as conventional mort pro, and you must take it,
you cannot shop around. It is claimed that it contains sickness cover, but I fear it would be
quite a battle to get the underwriting co. to honour this.
 
learnwell said:
What you pay as rent really is rent, the amount does not decrease as Brendan suggests. It remains in full and must be cleared in full at the
end of the mortgage period if necessary by another mortgage.
Click to expand...

Did you look at your annual statements?

If the "rent" exceeded the interest charged, which it should have done, then the balance should have reduced.

the mortgage protection is only on the purchaser's share, not on the councils share
which makes it about 3 times
Click to expand...

With a conventional mortgage protection policy you pay a level premium for the whole of the term. AFAIR, with this policy, the premium declines as you pay down the capital.

Brendan
 
From personal experience my rental portion has been decreasing at only a slightly lower rate than the mortgage portion.
The balance on the rental portion is due in 10 years. I'm hoping at that point to have a zero balance, but if not, if it continues to decrease along the same lines, the amount will hopefully be very manageable.
The cost of the mortgage protection, although still high, has also decreased, in 10 years it has reduced from 68.20 to 38.84.
This is only on the mortgage portion as at the time DCC did not permit protection to be taken out on the rental equity. They've since changed this but I didn't take them up on it due to their higher charges.
 
As for the mortgage protection I can say that on a principal of €144500 the annual premium
@ .4703% as charged by DLR was €679.61. An online quote from Irish Life for the same
amount, same age, same term was €190.44. Seems like an incredible 3.5 less. Its a huge
burden on shared ownership clients who by definition are on low pay,(they wouldn't qualify
if not on low pay).
 
Hi learnwell

It's a Community Rated product which I explain in this post.

And as I explain:


Switch your mortgage to AIB and pay 4.5% interest rate instead of what you are paying now. What is the rate of interest?
 
Hi Brendan, Rate of interest for 2013 was 2.75%, there has been no notification of change for 2014. The Mort Pro is only paid on the borrowers share, not also on the council share as I think you may have suggested in an earlier post.
As far as I know people with a mortgage from banks ect do not have to accept
the Mort. Pro offered by the bank, but can shop around. I think this is laid down by the Central bank and would be in the spirit of consumer freedom of choice.
I imagine any other approach would be also in breach of EU consumer policies.
Admittedly there is a strong social dimension to SO, but I wonder does this
trump the idea of freedom of consumer choice, which is such an important plank
of the EU.
"Switch your mortgage to AIB and pay 4.5% interest......" ; it would be nice to switch my Mort.Pro. to AIB and leave my mortgage where it is.
 
learnwell said:
"Switch your mortgage to AIB and pay 4.5% interest......" ; it would be nice to switch my Mort.Pro. to AIB and leave my mortgage where it is.
Click to expand...

You are missing the point. It's sold as a package, as a bundle. You are saving 1.75% interest on your mortgage, so that is €3,500 a year on a €200,000 mortgage. Some SO customers are getting a great deal. As you are single, young and healthy, it's costing you around €300 extra a year.
 
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