Ripped off on my first house purchase

flopstocks

Hello all, my partner and I recently purchased our first brand new affordable house with the 106 aggreement. With this aggreement we pay 68% of the market value, and when we come to sell we get 68% of the sale price. We were very happy with this thought we could not loose.

Unfortunately our timing was very bad, our first visit at the sales office was in Nov 07 and we'd be paying 68% of £172000 based on the current market value. Any way we did not complete until April 08 where we paid 68% of £172000. Stupidly we did not question the price at the time.

Recently a similar house to ours with the addition of a garage sold for £146000. This made me think we had been overcharged. I decided to look in our file at the office, and was horrorifed to find a letter from our mortage advisor stating the market value of the house in April 08 was £155000. This was not brought to our attention, maybe because the mortage advisor is linked to the developers. Also our solicitor did not inform us of this either.

Just wondering were we stand now, I really wish we questioned the market value at the time of purchase.

Thankyou

scope

A lot of people are in the same boat as you, luckely you didnt buy 100% of the house, atleast you are sharing your loss with the Housing Association (or whoever ownes the last 32%).

Besides unless you sell the house nobody has made a loss nor a gain, so dont worry about it.

kinglewis

I don't think you were ripped off.. properties (if you are selling) have reduced by around 20-25% in some areas... yours has dropped by around 18%. It's the luck of the draw what happens to the market after you buy there will be thousands of people in the same position as you.

Your only possible argument would be with the person who surveyed the house.. but they will surely say that property prices have fallen in line with the national average.

A bitter pill to swallow i know but if you are not selling just wait and over time the value will return.

Good luck!

nic_santorini

you really have to question the validity of the mortgage company. I wanted to buy a house for £215 in May and the mortgage valuers valued it at £213 and would NOT let us buy it unless the price was reduced. I would seek some advice, especially if you have seen that paperwork for £155,000 at the time. (Book an appointment at Citizens Advice) They should have surely advised you of this and that your mortgage would now be less? Sounds really bad to me. I fully understand where you are coming from because I have just sold my shared equity house, it was a nightmare, had it for 5 years and made an £11k loss. I would have been better off in rented accommodation but the pressure is always on to be a houseowner. arrrgghhhh

McKneff

stop worrying

unless you are thinking of moving, you have or are not losing anything.

Get on with enjoyiing your life.

Youre wasting valuable living time.

sjcollett

If the market value was 155k BEFORE you bought it, I don't understand how you got the mortgage for a valuation of 172k. Perhaps call the broker and ask?

kinglewis

If the market value was 155k BEFORE you bought it, I don't understand how you got the mortgage for a valuation of 172k. Perhaps call the broker and ask?

The house was valued at £172k in Nov 07 and £155k in Apr 08... sounds about right when the significant drops happened. I don't think the mortgage advisor would have a legal obligation to tell you but certainly puts his/her morals to question!

flopstocks

sjcollett wrote: »

If the market value was 155k BEFORE you bought it, I don't understand how you got the mortgage for a valuation of 172k. Perhaps call the broker and ask?

The mortage was setup in principle in Oct 07, and then the market dropped. We did not agree the purchase price, and it was subject to change. I just feel like the drop in value should have been brought to our attention.

Pont

flopstocks wrote: »

Hello all, my partner and I recently purchased our first brand new affordable house with the 106 aggreement. With this aggreement we pay 68% of the market value, and when we come to sell we get 68% of the sale price. We were very happy with this thought we could not loose.

Unfortunately our timing was very bad, our first visit at the sales office was in Nov 07 and we'd be paying 68% of £172000 based on the current market value. Any way we did not complete until April 08 where we paid 68% of £172000. Stupidly we did not question the price at the time.

Recently a similar house to ours with the addition of a garage sold for £146000. This made me think we had been overcharged. I decided to look in our file at the office, and was horrorifed to find a letter from our mortage advisor stating the market value of the house in April 08 was £155000. This was not brought to our attention, maybe because the mortage advisor is linked to the developers. Also our solicitor did not inform us of this either.

Just wondering were we stand now, I really wish we questioned the market value at the time of purchase.

Thankyou

Just three points:-

1) As already mentioned I think you should stop worrying about the £ signs and just start enjoying your home! I've just bought, for the first time, at the ripe old age of 40 something (;)). I'm now being told by all and sundry I could resell and make between 30 and 50 thousand pounds. Why would I want to? I've bought a lovely family home - I don't want to move for the foreseeable future.

2) As we all know it's a dodgy property market at the moment. What can make you 10K one week, can lose you 10K the next. All anyone can do is ride the storm - but be happy while you're doing so!

3) If the valuation of your house has fallen by such an extent why not try to buy out some (or all) of the 32% shared equity? Obviously 32% of £146 000 is substantially less than 32% of £172 000 (haven't got a calculator on me to work it out and it's too late to attempt it longhand!)

PasturesNew

pont wrote: »

32% of £146 000

£46,720

pont wrote: »

substantially less than 32% of £172 000

£55,040

Oldernotwiser

You have just learnt the first rule of house ownership - property prices can go down as well as up!