Selling a shared ownership property

mrsdarbs

This is my first time using this forum so I apologise if I have missed a thread regarding this elsewhere.

I am currently the owner of a 2 bed third floor new build flat on a shared ownership scheme. I have had the property valued and has been marketed for 3 months with the HA, but no interest at all. They have now allowed me to advertise this on the open market if I wish.

I no longer live in the property as I married my partner and we now live in his house.

I am allowed to rent this out short term according to the HA rules as I have actually moved out of the area. I would just need a letter from my employer comfirming where I was working (the flat is in Kent and I know live in Co Antrim, NI). This can be done for a year when it will be reviewed and in special circumstances can be extended, but always reveiwed on a regular basis.

Firstly, can I rent out the flat and leave it on the market for sale??? I have no idea on the legalities of this. I am hoping to speak to the HA at the end of the week as no one is available at the moment.

I am just trying to cut my costs as at the moment we are having to pay out for two properties and we just cannot afford it.

I have no idea whether to fork out the £350 for the HIP pack and put it on the open market or try and advertise it myself for a while? I need to pay a further £150 in February to ave it revalued as the 6 months will come to an end.

I am really just after some advice! Please, what would you do in this situation, given the current market????

Many thanks

brit1234

Good luck, I have a friend in the same situation and it is differcult for them. Again no viewings, I guess more and more people are aware of the shared ownership pit falls.

However i have another friend who swapped his shared ownership property for another one in a different part of the country, but that was before the downturn.

Debt_Free_Chick

mrsdarbs wrote: »

Firstly, can I rent out the flat and leave it on the market for sale??? I have no idea on the legalities of this. I am hoping to speak to the HA at the end of the week as no one is available at the moment.

Legally, yes - but the HA might not agree to it. You'll need to ask them.

Bear in mind that many tenants are looking for more than a six-month let. If you let it, then a tenant only gets six months guaranteed and if you find a buyer, then you're not going to extend the tenancy, are you? So ... your tenants will be out after six months and many will not want to risk that, so they will simply look for another property to rent. You are limiting your market if you try to let a property that you have on the market, for sale.

Also bear in mind that your tenants will not really find that potential buyers traipsing around "their home" eyeing up their dirty laundry and unwashed dishes a particularly appealing prospect

And if they do have their dirty laundry on the bedroom floor and tea stained mugs on the work surface, it's not going to do a lot to sell your property to a buyer.

All in all, selling a property occupied by tenants is not a recipe for immediate success - for LL or tenant.

robin_banks

I'll be honest ( I work for a HA - and I think shared ownership is a con) the answer is ver likely to be a big fat no, you'll be in breach of your tenancy on the rental side, and your mortgage on the element of your ownership.

Can you imagine the legal grief you'd be in if you sold a shared ownership, the HA did have people ready to move in, contracts exchanged etc, and you turn round and say ' but I've got sitting tenants?'.

You'd be in a world of !!!!, and in all honesty you'd deserve to be.

Richard_Webster

Tenants under an assured shorthold get 6 months minimum tenancy and you have to give them 2 months notice, so if you find a buyer he will probably get fed up waiting for the tenants to go!

Part of the problem at the moment is that nobody really knows what a property is worth so it is a bit silly getting it valued and then hoping somebody will pay that price, which is probably what you have to do according to the HA rules. Better and more sensible to find a buyer first and get HA to approve price, but will they agree to that?

bluejake

And the lesson is don't touch a shared ownership property with a barge pole.

mlz1413

OP as you live so far away you need to look at fully managed services which are going to take a large chunk of the rental. I really doubt any tenant will agree to allow viewings to sell the place unless the rent is low enough for them to feel compensated for such a situation. So in short the rental you could possbile get is going to be very low.

I really doubt selling prices are going to remain on a level, far more likely to keep going down, so I would put it on the open market as an informal tender and hope someone makes an offer.

The only other choice you have is to live to your house and sell / rent out your partners, but as you have made the move over there I guess you don't work in Kent any more so this option is of limited appeal.

devon_guy

Why is everyone always so negative about shared ownership properties? There's no way on earth I could afford my lovely property without it. My mortgage and rent is far less than the rent would be privately on the same property by about £200 a month plus I can staircase up to 100% ownership. I can't see the problem.

Bargain_Rzl

devon_guy wrote: »

Why is everyone always so negative about shared ownership properties? There's no way on earth I could afford my lovely property without it. My mortgage and rent is far less than the rent would be privately on the same property by about £200 a month plus I can staircase up to 100% ownership. I can't see the problem.

Because the terms are usually very restrictive, the properties are usually overvalued (and non-negotiable in price!) and an awful lot of people buy into overpriced schemes without fully understanding the implications of being tied to a property which can't be sold or rented out as easily as one bought on the open market.

Also, a lot of people seem to overstretch themselves financially just to "get on the ladder" by buying shared ownership, and it seems to be almost encouraged. When I was buying my place I think the minimum you had to be earning to qualify for my specific flat was something like £18k. Now I was on £27k at the time and there is no way on God's earth that I would have considered that level of financial commitment (per month, £300 mortgage + £220 rent + £80 service charge) if I was on £18k. I might be happy to pay the equivalent (£600) on a rental property, because at least I wouldn't be tied to that long-term if I started to struggle for some reason.

Like you, I live in a good value for money shared ownership property which is well within my means and I intend to stay there for a long time, but I can totally see why people are negative about it in general.

robin_banks

We pulled out of a shared ownership in North London, combined mortgage, rent, service charge would have been £1200 a month. The scheme was massively overvalued and 1 year after the development was finished many of the properties remain empty. A poster mentioned that only 3-5 % of shared ownership purchases move on, this may suggest they are stuck in a property they may not be able to sell.

wymondham

General quick question not aimed at anyone in particular:

With a HA having this much control over 'your' property, does it not show the failings of these schemes. You don't get the flexibility that people generally want when buying a place, with the HA almost acting as a landlord?

Are these schemes any better than renting, especially in a market when you're not even likely to see any financial benefit in the form of equity?