Selling a home bought under the First Time Buyer Initiative

sturgeon

Please note that any advice given will need to be specific to the First Time Buyers Initiative scheme, not any other first time buyer or shared ownership scheme as they all have their own terms and conditions.

I bought 50% share of a property. I know when I sell it, the 50% is paid back of whatever the property sells for and I must inform Metropolitan Homes, the company responsible for the scheme in my area (I believe...may not just be my area though) that I am selling it.

The confusion lies in how the sale works-would I treat is as a 'normal' property sale and when it's sold and I receive the funds, I would THEN pay off the 50% loan and keep the rest if anything is left over? Or would I (somehow?!) pay off the loan prior to selling the home? I understand it may be 'difficult' to sell a shared ownership home but don't understand why-does it cause problems for a buyer if the property was under shared ownership?

So say I bought the property for £200,000 originally but sell for £250,000, the scheme means I pay back £125,000 but 'keep' the other half, effectively meaning I made £25k profit? If they somehow want the loan paid off first before the property is put on the market I don't get how we can sell.

Cannon_Fodder

From http://www.mho.co.uk/your-options/first-time-buyers-initiative/ you can access http://www.homesandcommunities.co.uk/public/documents/HCA_FTBI.pdf

• A second charge will be placed on the property by the buyer’s solicitor in favour of the government entitling it to a share of the future sale proceeds. This means that the buyer must repay this when they sell the property.

What happens when owners sell their FTBI home?
[FONT=Daxline OT,Daxline OT][FONT=Daxline OT,Daxline OT][FONT=Daxline OT,Daxline OT]" When owners sell their FTBI home, they will repay the government its entitlement to a share of the future sales proceeds. So if a buyer initially purchased with a 70% mortgage and a 5% cash deposit and has made no other repayments, it will repay the government 25% of the value at the time they sell. The National HomeBuy Agent will recover the government’s repayment.
Owners can sell their property at any time and an independent surveyor will decide what it is worth. The property will be sold on the open market at the prevailing market valuation. The government’s entitlement must be paid when a buyer sells the home. The buyer will pay the costs of selling. "
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Its the second charge that needs to be satisfied at the point of sale, for the new buyer to be happy they get the "whole" property. Solicitors and the Homebuy Agent should sort this, and be able to explain in greater detail if needed.