Northern Ireland Co Ownership / Negative Equity?

JoJoUK_2

Hello all,

I’ve done a search of the forum and haven’t been able to find the answer so decided to post for the first time.

My girlfriend and I purchased a property in 2008 for £175,000 through the co-ownership scheme in Northern Ireland (ww.co-ownership.org) on a 50/50 basis; this meant that we owned (mortgaged) half of the house (at the time this was worth £87500) and rented the other 50% from NICO.

We currently have an outstanding mortgage of £81,500 so therefore if the house was sold for £175,000 we would have (around) £6000 to play with as deposit. I very much doubt that we would be able to sell for that price however.

My question is does Northern Irish Co-Ownership allow you to sell/move if they are going to make a loss, for example if the house was sold for £125,000 then the mortgage would be cleared but NICO would not make their original investment back. Also would we still keep the £6000 or would the sale proceedings get split between the mortgage lender and the rest go to NICO?

We would like to sell our home and move (need the room), we would like to stay with co-ownership but on a 60/40 basis (we would be the 60%), we also wanted to port out mortgage product across to the new home (max purchase price of £175,000, most likely £160,000).

Many thanks for any help, I’ve tried contact co-ownership but I have had no answer and my lender is unsure, I used to work for them but unfortunately all my mortgage knowledge as leaked out, much like the equity in our home!

j1mgg

my understanding from being in a shared ownership from a housing association is that it is 50/50 down the middle al the way.

So from your info, if you sold for 125,000 the it would split between 2, so you would get 62,500 and so would the other half leaving you with a outstanding balance of £19k.

Would you not just sell your half and someone buy it and the other investor would still own the half and there not really lose anything.

katie1234

OMG. im in exactly the same position almost down to the house price and after a lot of research including going to the solicitor i have the answer for you (im afraid).
we too need to move so i got my knowledge from the bank, solicitor and co-ownership themselves so unfortunately is pretty accurate.
basically the answer is no. if your house will make a loss then co-ownership will not let you sell it. in the event that you HAD to sell you can take them to court as legally the house is yours to do what you want, against human rights etc however my solicitor advised this would be difficult and very costly so really a last resort. when you sell the house the bank will get all their money instantly (81k). you will never owe the bank as long as the sale of the house will cover the mortage. the bank owns your house not co-ownership. whats left owing to co-ownership will be covered by the remainder of the house sale and if that doesnt cover it they wont let you sell or you can sell and make up the rest in cash yourself. all 24K of it in my case! they dont do payment plans unless your house is repossessed and then you still owe them their share. got our solicitor to go over the contract to see if there were any loop holes etc but there arent. solicitor also wrote to co-ownership to confirm this is correct and unfortunately it is.
just to clarify this is co-ownership in northern ireland using the old scheme. post 2009 is slightly different i think. worse actually!


as for getting another home transferring mortgage etc no idea. far to complicated for me!

hope this helps! there office is actually really helpful though and (most) staff know what there talking about so give them a ring.

anotherginger

unfortunately i think you are right in saying that you won't get 175k for the house...a friend of mines 200k purchase in 2007 is now only 130k.

to be honest, why did you choose co-ownership for such a short term purchase? or buy a house at all? you have only had the house for a maximum of a year and half.

katie1234

hindsight is a wonderful thing.

anotherginger

katie1234 wrote: »

hindsight is a wonderful thing.

it is, but buying a house to live in for a year and a half is a bit short sighted!

JoJoUK_2

Still looking to sell, haven't done anything as of yet as we just got married a few months ago.

The reason we want to sell is because the builders left half way through the job leaving the site in a mess only to have another builder come in and 'finish' the job (put in sub standard housing and use the site as their own personal storage yard), the area is not how we expected it would turn out.

I did speak to co-ownersship who have stated on the phone (and via email) that they will take a loss on the property is sold below the original purchase price. It's just unfortunate there is no buyers, some family are interested and would love to keep it on with co-ownership, I doubt co-ownership will go with that!

Michele123

Hi Jojo

Just wondering that you say co-ownership have stated that they will accept a loss on the house, is this a special circumstance? as i have phoned them about a year ago and been told i would owe the difference if the house sold for less than originally purchased which is currently an amount of £23k and obviously impossible to pay!!

saverbuyer

Michele123 wrote: »

Hi Jojo

Just wondering that you say co-ownership have stated that they will accept a loss on the house, is this a special circumstance? as i have phoned them about a year ago and been told i would owe the difference if the house sold for less than originally purchased which is currently an amount of £23k and obviously impossible to pay!!

Night be an idea to try the Northern Ireland form. There's been a few posts on co-ownership in the past.
http://forums.moneysavingexpert.com/forumdisplay.php?f=32