For a successful life, Paul Afshar thought he needed to achieve the following: get a job, buy a home in London. and have a happy relationship. So when he got on the property ladder aged 24, he felt optimistic about his future.
Afshar, now 41, used Southern Housing’s shared ownership scheme to buy 25 per cent of a one-bedroom flat in London in 2007, with the hope of continuously saving money and buying more of the property until he owned it outright. Working in marketing for a tech company and without financial help from his parents, it seemed like the perfect solution.
But in the years that followed, he discovered the drawbacks of shared ownership. Under these agreements, touted as an ‘affordable’ way for people to own a home without a deposit, tenants take out a mortgage on their share of the property and pay rent to a housing association on the remainder. But now, amid rising mortgage costs and bills, and with many shared ownership properties caught up in the building safety scandal, they are turning out to be a disastrously bad deal for some. They find themselves trapped in unsellable homes, with all the downsides and none of the benefits of homeownership.
Afshar put a 5 per cent deposit of £2,500 on his share of the flat at the time and entered a 35-year mortgage on a standard variable rate. Over the last 17 years, his monthly payments have increased drastically – his mortgage alone has risen 48 per cent from £268.65 to £400.28.
Although he only owns a quarter of his flat, which sits alongside 40 others in a block in Hackney, he’s eligible for 100 per cent of the maintenance costs, including the service charge covering communal areas. These bills have also gone up – he now pays £865.48 on his rent and service charge. But in 2020, when he attempted to put his share of the flat on the market, planning to move out and find a bigger place, he discovered for the first time that his block was affected by cladding. He had two offers fall through, both stating that their mortgage provider had deemed the property unsafe.
“It absolutely ruined Christmas,” he says. “I was hoping for a quick sale. Not only did that not happen – we discovered it was unsellable and I was potentially going to have a massive bill to pay.”
Looking back, he wishes that the increase in service charge and mortgage rate, as well as selling protocols, had been explained fully. “I got into something I didn’t fully understand. I was sold a dream of homeownership and it’s come back to bite me years later. It’s heartbreaking.”
Although there’s been extensive campaigning from the End Our Cladding group, and The Building Safety Act 2022 includes measures to protect certain leaseholders from the cost of works to remove cladding that has a risk to life, Afshar’s flat block isn’t eligible for government funding as it’s under the required 11 metres. He says fixing it will cost in excess of £50,000.
1 comment
For a successful life, Paul Afshar thought he needed to achieve the following: get a job, buy a home in London. and have a happy relationship. So when he got on the property ladder aged 24, he felt optimistic about his future.
Afshar, now 41, used Southern Housing’s shared ownership scheme to buy 25 per cent of a one-bedroom flat in London in 2007, with the hope of continuously saving money and buying more of the property until he owned it outright. Working in marketing for a tech company and without financial help from his parents, it seemed like the perfect solution.
But in the years that followed, he discovered the drawbacks of shared ownership. Under these agreements, touted as an ‘affordable’ way for people to own a home without a deposit, tenants take out a mortgage on their share of the property and pay rent to a housing association on the remainder. But now, amid rising mortgage costs and bills, and with many shared ownership properties caught up in the building safety scandal, they are turning out to be a disastrously bad deal for some. They find themselves trapped in unsellable homes, with all the downsides and none of the benefits of homeownership.
Afshar put a 5 per cent deposit of £2,500 on his share of the flat at the time and entered a 35-year mortgage on a standard variable rate. Over the last 17 years, his monthly payments have increased drastically – his mortgage alone has risen 48 per cent from £268.65 to £400.28.
Although he only owns a quarter of his flat, which sits alongside 40 others in a block in Hackney, he’s eligible for 100 per cent of the maintenance costs, including the service charge covering communal areas. These bills have also gone up – he now pays £865.48 on his rent and service charge. But in 2020, when he attempted to put his share of the flat on the market, planning to move out and find a bigger place, he discovered for the first time that his block was affected by cladding. He had two offers fall through, both stating that their mortgage provider had deemed the property unsafe.
“It absolutely ruined Christmas,” he says. “I was hoping for a quick sale. Not only did that not happen – we discovered it was unsellable and I was potentially going to have a massive bill to pay.”
Looking back, he wishes that the increase in service charge and mortgage rate, as well as selling protocols, had been explained fully. “I got into something I didn’t fully understand. I was sold a dream of homeownership and it’s come back to bite me years later. It’s heartbreaking.”
As shared ownership homes are usually sold leasehold in new build developments, many owners are being affected by poor building practices, such as [unsafe cladding](https://inews.co.uk/inews-lifestyle/stuck-flat-cladding-sell-terrified-family-3248335?srsltid=AfmBOopZ0aFnSe-QJA10UiskdZgXmFTXxgqOemtyKMpUcSRsVtCWEaQV?ico=in-line_link), that have only arisen in light of the Grenfell Tower fire. The latest government statistics shows that nearly 4,000 buildings over 11 metres in height in England have been identified as unsafe due to cladding. Only a fifth have been fixed.
Although there’s been extensive campaigning from the End Our Cladding group, and The Building Safety Act 2022 includes measures to protect certain leaseholders from the cost of works to remove cladding that has a risk to life, Afshar’s flat block isn’t eligible for government funding as it’s under the required 11 metres. He says fixing it will cost in excess of £50,000.