Shared Ownership Nightmare-any tips?

sukieq

Hi

I'm having a nightmare in the process of buying a Shared Ownership property and would appreciate any advice.

I exchanged contracts on a New Build shared ownership property in June 2008 and obtained a mortgage for a 25% share (full value £280,000) on a 3 year fixed rate deal of 5.74%.

The flat was bought off plan (as were all the flats in that block) with a completion date set for mid July. The completion date has been put back every month and the last I heard (2 months ago!) was that the completion date was to be 17th November 2008 although the housing association have failed to respond to my numerous emails/telephone messages to clarify this.

In the meantime my mortgage offer has expired and the lender has declined to extend it on the original rate (its now 7.4% for 3 year fixed rate deal).

A new valuation has been done which initially stated that the flats had gone down 10% in value but then the same surveying company are now saying the value has not declined since March 2008 (when the last survey was done). I'm clearly not the most savvy person otherwise I wouldn't be in this position now but even I know that 2 bed new builds have been hardest hit recently and am incredulous that mine has stayed the same price.

I'm in a position now where I have exchanged contracts on a flat with no clear completion date, no mortgage and a current valuation which is defying all the realities regarding falling house prices.

My solicitor also informed me that if I were to pull out the Housing Association may sue me for 10% of the value of the flat.

My main reason for doing this was that I wanted some stability for my young son and not be subject to the whims of landlords in the private sector.

Is there anything I can do as clearly I'm clueless as to what to do next

Thanks

poppysarah

Your solicitor should have told you all the perils of signing for a property not built - is 10% of the full price or 10% of the 25% ?

This is why social housing is so important.

You need to go through all the options with your solicitor. Are there no penalties for the builder? Sounds very unfair.

You may get stuck with the loss. If it's a big enough debt you may end up going bankrupt if you can't afford it on top of living expenses etc.

Solicitor first and then the CAB perhaps - but sounds like you're a bit stuck.

sukieq

Thanks Poppysarah

I think its 10% of my share but need to check it out. I have a 2 year old and a chronic disability but am still quite low on Brent Councils housing list! As I have a good job/reasonable wages I didn't want to go via social housing.

My intention is to complain to anyone who will listen as I am classified as a keyworker and the scheme was supposed to help people who couldn't afford to buy a home outright not bloody bankrupt them! I feel totally stitched up.

To anyone who is thinking shared ownership is a good idea please do your homework-I clearly didn't.

Trollfever

I would contact The Housing Corporation and my MP.

The Housing Corporation is the government agency that funds new affordable homes and regulates housing associations in England.
Contact us on 0845 230 7000 or by email.

http://www.housingcorp.gov.uk/

robin_banks

I've got to say this does not surprise me, my partner and I pulled out of a shared ownership purchase due the valuations, and I'd now advise to give it a wide berth. We didn't do our homework but I now thank my lucjy stars I'm not caught in this kind of nightmare.

abaxas

Cant offer any tips other than..

Good luck.

poppysarah

These shared schemes are so utterly wrong.

If you can't afford to buy a house you should be able to find safe secure housing at a sensible rental cost.
This government has lost the plot regards this and many many people are going to be in financial dire straits and left homeless and penniless and everyone in the UK suffers as a result.

robin_banks

I wouldn't go that far sarah but I do take your point.

Shared ownership in principle was a good idea but the reality of it has become having none of the advantages of owning a property with all the disadvantages of renting, mainly through the actions of housing associations.

A house is a machine for living in and no more than that, and as a society we have started to base our wealth on house prices which is utterly artificial.

mean_momma

robin_banks wrote: »

d I pulled out of a shared ownership purchase due the valuations, and I'd now advise to give it a wide berth.

My ftb son was all set to buy a part buy part rent resale from Notting Hill Housing Trust. The price seemed high for a 2 bed in a block backing onto the railway line and behind a council estate, but the HA reckoned that the value was correct. The fact that the mortgage would be lowish, (although the rent would be high) made it just about affordable. Just as he was seriously tempted, the wholly owned flat next door came on the market via Foxtons, not known for realistic valuations. This flat was in better condition and being sold for £20,000 less. Alarm bells rang loudly and he pulled out.

I had heard before that many HAs aim to make profit from selling properties in order to subsidise their tennanted properties. A spokesman from one of the big building companies was talking on Radio 4, You & Yours, last week, stating he case for more building of 'affordable homes'. He more or less seemed to confirm that this was the case.

robin_banks

Ditto same HA, same circs, same development?

mean_momma

robin_banks wrote: »

Ditto same HA, same circs, same development?

This one was in East Putney. It boiled down to paying £20,000 over the odds in order to secure the 25% share. The HA would not revaluate the asking price, saying that they had to give the vendor £20,000 for a grubby carpet and some shoddy 'improvements'.

Which leads on to the vendor's position when the time comes to sell a property controlled by the HA.......