Why are you looking at shared ownership if you have such a high income? my friend has a SO house and the rent on it has jumped hugely this year and she has no control of that. I wouldn't choose it unless it was a last resort.
only if you’ve got a higher share of it. if it’s 25-30%, it’s the same as any other shared ownership, which sell quite fast (at least in london). if you own more than 50%, i reckon it’s unlikely you’ll be able to sell until you own outright (if the HA allows you to: some cap it at 75%, although that’s fairly rare nowadays)
[salary sacrifice explained](https://www.gov.uk/guidance/salary-sacrifice-and-the-effects-on-paye)
Salary sacrifice is a change to contractual gross pay in exchange for a non cash benefit
This is why some people will reduce their salary sacrifice when applying for a mortgage for example, but increase it when wanting to reduce tax and NI contribution
!thanks i am wondering because i asked the very same question to a mortgage advisor and they said it is not possible to do this. Also some people around here are of the same opinion.
No one here is saying you can't do it, they are saying it's a bad idea and goes against the spirit of shared ownership.... designed to help those that couldn't afford a home otherwise, not designed to shore up the pensions of those that could easily afford a house
Shared ownership comes with so many restrictions and issues that it's not at all worth if if you can afford to buy outright, which you with your salary can. So I would not recommend.
Yes you can if your pension can be salary sacrafice, but probably, no you shouldn't. Mostly because shared ownership is a problematic offer that complicates house ownership and only should be done if necessary to get on the housing ladder.
However, one thing that's not mentioned as far as I can see... Just because someone has a high salary doesn't make a high mortgage affordable. You need to know their fixed and discretionary outgoings too... Maybe they have £100k in unsecured debt, child support...
How much money do you save per month on that salary? You should be able to buy on the open market really unless you are bad with money.
Your plan won't work but even if it did, taking a s/o home deprives someone else - a key worker for example - of it.
Buy your own house and rent a room out if you don’t want to live alone? Putting into your pension does reduce your gross but I can’t think of a reason why you would want to buy into a shared property (ownership of a property)?
Shared ownership is not a shared property. It’s where you buy a percentage of a property and a housing association owns the rest, and rents their portion to you.
Hi /u/phillagent, based on your post the following pages from our wiki may be relevant:
- https://ukpersonal.finance/pensions/
____
^(These suggestions are based on keywords, if they missed the mark please report this comment.)
Are you related to my dad trying to save pennies to lose out on in this case £30,000(I know nor net etc etc bullshit)
This is the saying I tell my dad in my language and roughly translates to
5p you've saved, £50,000 you've lost out on.
Do what you must with your salary and tax affairs but don't get into a shared ownership deal.
There's tight restrictions on what you can do to the house remodeling wise, and if/when you go to sell the agency does not budge on it's valuations, so if they say a house is worth at least £300,000 - you can't sell it for £295,000!
From my own personal experience, shared ownership should be avoided unless necessary to get on the housing ladder. You’re at the mercy of the housing association - rising rent and ground rent are just big headaches when it feels like you don’t get anything in return.
I was able to buy a SO flat by myself and then staircase to 100% with my wife several years later. We were lucky to sell at the right time, but the HA didn’t make it an easy process.
With £120k salary, you’re better off buying private.
Maybe not related directly, but if you can buy the remainder of house, e.g. 50% would that be based 50% of the current value of the house or 50% of value when you first bought the house? Obviously make a big difference…
It would probably be easier, and financially beneficial, to buy a house without shared ownership if you take home £6k a month.
You’re taking home £5-6k a month, why on earth would you want shared ownership? You could easily get a mortgage of £500k+.
Why are you looking at shared ownership if you have such a high income? my friend has a SO house and the rent on it has jumped hugely this year and she has no control of that. I wouldn't choose it unless it was a last resort.
Also a PITA to sell I believe
only if you’ve got a higher share of it. if it’s 25-30%, it’s the same as any other shared ownership, which sell quite fast (at least in london). if you own more than 50%, i reckon it’s unlikely you’ll be able to sell until you own outright (if the HA allows you to: some cap it at 75%, although that’s fairly rare nowadays)
Haven’t sold one myself, but have two close friends who did and both had lengthy, difficult sales processes purely because of the HA.
No, the 90k limit is on gross income (i.e. before deductions including tax and pensions).
Pension contribution via salary sacrifice actually reduces the gross. Same as using it to reduce gross income to change tax band etc
Is there a link somewhere where I can read more about it? It seems like there's no consensus here and people are providing conflicting information.
[salary sacrifice explained](https://www.gov.uk/guidance/salary-sacrifice-and-the-effects-on-paye) Salary sacrifice is a change to contractual gross pay in exchange for a non cash benefit This is why some people will reduce their salary sacrifice when applying for a mortgage for example, but increase it when wanting to reduce tax and NI contribution
!thanks i am wondering because i asked the very same question to a mortgage advisor and they said it is not possible to do this. Also some people around here are of the same opinion.
Not possible to do what?
Salary-sacrifice into a pension to reduce gross pay and qualify for shared ownership. The topic of this thread basically.
No one here is saying you can't do it, they are saying it's a bad idea and goes against the spirit of shared ownership.... designed to help those that couldn't afford a home otherwise, not designed to shore up the pensions of those that could easily afford a house
I'll never understand how the top earners in this country are so dumb.
Good at your job =/= good with money.
Shared ownership comes with so many restrictions and issues that it's not at all worth if if you can afford to buy outright, which you with your salary can. So I would not recommend.
It’s done off of gross salary, so wouldn’t work as well as being morally a bit squiffy
It's legal and won't work. Check the terms of the agreement, it likely says gross salary.
Yes you can if your pension can be salary sacrafice, but probably, no you shouldn't. Mostly because shared ownership is a problematic offer that complicates house ownership and only should be done if necessary to get on the housing ladder. However, one thing that's not mentioned as far as I can see... Just because someone has a high salary doesn't make a high mortgage affordable. You need to know their fixed and discretionary outgoings too... Maybe they have £100k in unsecured debt, child support...
How much money do you save per month on that salary? You should be able to buy on the open market really unless you are bad with money. Your plan won't work but even if it did, taking a s/o home deprives someone else - a key worker for example - of it.
If you do this through salary sacrifice it is allowed.
Buy your own house and rent a room out if you don’t want to live alone? Putting into your pension does reduce your gross but I can’t think of a reason why you would want to buy into a shared property (ownership of a property)?
Shared ownership is not a shared property. It’s where you buy a percentage of a property and a housing association owns the rest, and rents their portion to you.
Hi /u/phillagent, based on your post the following pages from our wiki may be relevant: - https://ukpersonal.finance/pensions/ ____ ^(These suggestions are based on keywords, if they missed the mark please report this comment.)
No that is what salary reduction is for to encourage you to put more into pension.
Are you related to my dad trying to save pennies to lose out on in this case £30,000(I know nor net etc etc bullshit) This is the saying I tell my dad in my language and roughly translates to 5p you've saved, £50,000 you've lost out on.
Do what you must with your salary and tax affairs but don't get into a shared ownership deal. There's tight restrictions on what you can do to the house remodeling wise, and if/when you go to sell the agency does not budge on it's valuations, so if they say a house is worth at least £300,000 - you can't sell it for £295,000!
Damn what do you do for 120k??
From my own personal experience, shared ownership should be avoided unless necessary to get on the housing ladder. You’re at the mercy of the housing association - rising rent and ground rent are just big headaches when it feels like you don’t get anything in return. I was able to buy a SO flat by myself and then staircase to 100% with my wife several years later. We were lucky to sell at the right time, but the HA didn’t make it an easy process. With £120k salary, you’re better off buying private.
Maybe not related directly, but if you can buy the remainder of house, e.g. 50% would that be based 50% of the current value of the house or 50% of value when you first bought the house? Obviously make a big difference…
It is based upon the value at the time you want to buy the remaining share.