Shared Ownership - Negative Equity

Richard_Webster

If HA valuer says place worth £130K then you have 2 problems with option 1:

1. You would owe £152K on mortgage but proeprty only worth £130K so you can't sell it.
2. Lender won't give further advance because you probably wouldn't get more than 90% of value, so they would probably only lend enough to to take the loan up to £117K. You will have to explain why you want the money and their surveyor can easily do the sums and work out that the HA surveyor has valued it at £130K, so he will pay safe too.

I don't know your local area, but it is much more likely that the £130K valuation is right. The £160K is probably the sort figure that other people locally are trying to sell similar flats for, but not succeeding much. The £175K was probably an over value at the time, based upon what the builder told the HA he thought the flats were worth!

angel1977

Thanks for the advise. So would you suggest we just stay here on the shared ownership basis and wait and see what happens to house prices?

lynzpower

to be honest with you, I tihnk weve established that option 1 isnt really an option at all.

As I see it your options are:

1) sell it and carry the loss on an unsecured loan that you will have to pay.
2) stay put.

I know that Camberley surrey is an expensive part of the UK, always has been probably always will be ( in terms of reliativity of course)

Where are you living at the moment angel, are you selling a property in view ofg you both living togwether in the flat- or new house, or do you already live in the flat.

angel1977

I sold my house at the end of May and have been living in the flat since then, but it was only supposed to be short term as we were going to buy a house together. Oh well, looks like that will have to wait. Thanks for your help

bubblesmoney

i think although shared ownership concept might be good in principle to help key workers get onto the ahousing ladder. but in quite a few shared ownership schemes in my area that i looked into as was curious what the scheme offered and whether it really was worth it even though i am not eligible for the scheme. in almost 100% of the cases i looked into i found that the houses were overvalued like all new builds and they were usually trying to overprice by 30% and then offer 50% shared ownership. a neat scam to put the keyworker on to the housing ladder and making a killing the asking price and put the negative equity of 15% from day 1 on the buyer. from the few shared ownership houses that i looked into out of curiousity i think its best to stay away from these schemes and buy what you can at market value rather then buy something overpriced and then given a incentive to buy

poppysarah

So the 130k isn't his shares worth?

Looks like he's stuffed if it isn't.