Shared Ownership Hell

FixingIt

I'm just after some general advice from people on here and what they would do in my situation. Basically I bought a shared ownership property (50% @ £62.5k) at the top of the market in city centre Manchester that I can't sell. It has been on the market almost 2 years and had a total of about 8 viewings. The price started at £60k and is now on the market at £47.5k. I reduced the price to 47.5 about 2 months ago and only attracted a single viewing.

I haven't lived in the flat for 18 months as I have moved in with my girlfriend who owns her own home (and mortgage) so the flat is just sitting empty. I only earn £1350 a month and the flat is costing me £800 a month so thats 60% of my wages getting flushed down the toilet. My mortgage is £60k so already I'd have to find 12.5k to sell and while this is dooable (with some pain) I don't know if I can afford to go lower.

I can't let the property out as the housing accosiation won't allow it, I don't have any disposable income at the end of the month and I can't help my OH out with her mortgage and pay her very little towards bills and I'm extreamly worried.

I've considered options like letting it get reposessed etc but it just doesn't seem right to me. It's my mess and I have to clear it up but I'm getting beyond desperate now. So I'm just asking for opinions on this, I fear it's just a case of dealing with the consiquences of my actions and I can say without doubt that buying the place is the worst decision I have ever made. I wouldn't touch Shared Ownership with a barge pole and I can fully understand FTBs staying well clear, that doesn't help my situation though.

Thanks in advance.

Colincbayley

£800 a month is a heck of a lot of money for a £60K loan, or does that include the management service charge also.

If you are on a repayment mortgage, why not try and change it to interest only until you sell the property as that will help you with cashflow.

FixingIt

£650 ish for mortgage, rent and service charge, the other £150 is things like council tax and other bits of bills.

I've already dropped it to IO.

heretolearn_2

Is there a reason you and girlfriend can't live in this flat and rent hers out?

But I agree, I think shared ownerships are generally to be avoided as an expensive option, not only are you paying mortgage, you also have to pay rent - the values originally sold seem to be higher than the market value but people go for them as they seem on the face more affordable, and it's hard to re-sell them.

Would the housing assoc consider buying your half from you so they can use it to let to their tenants - or can it join their list of private properties leased to them for letting to tenants?

FixingIt

Yes, we're expecting our first child and moving from a 3 bed house to a 1 bed flat in an urbanised area is not an option I'm afraid

I've tried to make a deal with the HA but they are not interested, although I haven't told them how desperate the situation is yet.

welshy_2002

Been empty for 18 months?

I'd have offered it to a mate and got them to 'move in' for a reduced rent. Even £100 a month is better than nothing. I know the housing association won't agree to a normal let, but if it's a friend living with you *wink*, would they really get involved?

Good luck

bitsandpieces

That sounds rough. A good place to start is speaking to CAB, Consumer Credit Counselling Service or National Debtline. You need to work out how much leeway you have with your mortgage, in terms of a sale (I don't want to depress you, but you'll need a bit more than £12.5k when you sell - to cover fees etc - although your bank may be happy to convert some or all of the negative equity to a loan).

If it hasn't sold for this long you could likely try a different estate agent (make sure you leave your current one correctly, to avoid being landed with two fees :eek:) You could post a rightmove listing up here and people will give you advice. However, you should also consider whether you can drop the price any further (if it's costing you £800/month, you would save almost £10k - although a small part of that is repayments on mortgage capital - by selling it now as opposed to in a year's time).

Check when you're getting advice on debt, but I think you get something like 6 months council tax exemption on unoccupied property. May help.

Pepzofio

Have you tried explaining your predicament to the Housing Association? They may be prepared to review the decision on subletting it if you can demonstrate that you have tried your best to sell it and are struggling to keep up with payments. If it gets repossessed they will lose out financially as the mortgage company gets first dibs on any proceeds from the sale and it sounds like it has depreciated in value considerably.

Alternatively, how big is the flat? If it is two bedrooms you could possibly rent out one of the rooms out to a 'lodger' and just pop back every now & then. As you would not be granting exclusive possession then this would not normally fall foul of HA subletting rules. You would get less money than renting out the whole property, but it would be more than you're getting now, and you would be in a much stronger position if anything went wrong. Lodger would probably bite your arm off as they'd virtually be getting a whole flat for lodger prices.

Pepzofio

Oops sorry, cross posted!

gravitytolls

Check your agreement carefully, there may be a clause that allows you to manage your property differently if you can demonstrate the terms and conditions are unfairly preventi ng your sale.

Many loical authority properties have covenants attached, which can be removed under those guidelines. They recommend that if a property is reasonably priced but not under offer after 6 mths, you can ask for the covenant to be removed ~ it's worth asking if there is a similar position on shared ownership.

Id be much more inclined to see if I could sell my share to the HA though, wonder if your MP could help with this.

FixingIt

welshy_2002 wrote: »

Been empty for 18 months?

I'd have offered it to a mate and got them to 'move in' for a reduced rent. Even £100 a month is better than nothing. I know the housing association won't agree to a normal let, but if it's a friend living with you *wink*, would they really get involved?

Good luck

For about 6 months I had a friend in it as you suggested but I'm all out of friends looking for a temporary place to stay at the moment. I wouldn't consider letting someone stay there that either myself or my OH knew quite well to be honest, just too much risk.