Shared Ownership Comparisons

Wolverley Proposed 5 year Budget:               

2017            Purchase £3500 + £500 + 2 x £50            £4100

4 years at £600 pa                                                      £2400

                                                5 year total                 £6500

Estimated capital asset value                                         £2500

Net cost of 5 years holidays (not including fuel etc.)       £4000

 

Budget comparisons (from actual shared ownership schemes):

Similar boats in privately managed schemes but using boatyards/marinas for moorings and services

Share purchase                                                            £3000

5 years at £1200 pa                                                     £6000

                                                5 year total                  £9000

Estimated capital asset value                                         £2500

Net cost of 5 years holidays (not including fuel etc.)       £6500

 

Identical boat in Commercially Managed scheme

Share purchase                                                           £ 3000

5 years at £1500 pa                                                    £ 7500

                                                5 year total                 £10500

Estimated capital asset value                                        £ 2500

Net cost of 5 years holidays (not including fuel etc.)      £ 8000

 

 

N.B. None of the above examples allow for unforeseen expenditure or inflation. It is assumed that any scheme can be subject to the former and that inflation would affect all schemes pro rata.

I have used a pessimistic estimate of Wolverley’s residual value, and an optimistic estimate of the other two schemes.

Other things to be aware of:

Some commercially managed schemes sell shares at artificially low prices i.e. substantially less than 1/12th the value of the vessel. They appear to be very good value for money on the initial purchase but may have to be sold back to the company, at an even lower price, when you no longer want to keep your share.

Annual costs in these schemes can be very high (up to £2k pa).

Some private schemes don't operate a contingency or improvements fund. Although they can keep their monthly or annual  subscriptions/fees low, whenever there is non-routine expenditure (such as a repaint) owners have to share that cost on top of their normal payments. 

Buy-in costs in private schemes vary enormously, from those where shares change hands at around 1/12th the value of the syndicate’s assets (like Wolverley) to those where prices are much lower. 

  

Possible reasons for low purchase prices:

The owner feels they have had their money’s worth during their ownership and is simply eager to ‘move on’ to other projects or activities.

The owner needs a quick sale for reasons unrelated to the boat or the scheme e.g. change of circumstances.

The owner is worried about problems with the boat and wants out.