Should I Sell or Let shared Ownership Property?

nonnyd

I'm hoping someone can offer me some good advice!

My situation:
- Two and a half years ago I bought a shared property flat in Manchester with my then partner (then valued at £17,000, I own 50%).
- When I discovered he was cheating on me 18 months ago I bought him out as I didn't want to loose my home.
- Due to current economic climate the flat is now valued at £146,500 (at least according to my mortgage lender, I haven't had this done properly yet).
- I have about £7000 in savings

I'd now like to move to Bristol to be nearer friends and family, so I loooked into buying the other half of the flat to rent it out, but my mortgage lender said I'd have to pay the equity on the half of the mortgage I already own (£5000) and find around an extra £20,000 before they'd give me a mortgage on the other half.

So my options now are:
1) Sell the flat, and spend all my savings and potentially more getting out of the mortgage.
2) Let the flat out, though this isn't allowed in the shared ownership agreement (however the housing association has never been to visit and I'm fairly confident they'd never find out).

I'd really appreciate some advice on the best thing to do, or if there's an option I haven't identifited. I don't really have anyone to ask and I've never had to make this kind of decision on my own before (having been with the cheating ex for my entire adult life!:().

Many thanks!

poppy10_2

You can't do 2), as that would be fraud. The fact that you don't think the housing association would find out is irrelevant.

Sadly you have learned the hard way that shared ownership is nothing but a scam, preying on the financially illiterate.

nonnyd

I'm not sure it would have been so horrendous had I stayed with my partner. We'd have stayed there a year or two more, in which time we could have the money to buy the other half while house prices were still low, then rented it when they went back up again. I don't think I'd definitely advise against shared ownership for everyone, I'd just get them to think more carefully than I did about how their life might change.

Anyway, you've ruled out option 2 (though I haven't ruled out explaining my situation to the HA and trying to persuade them to let me do this above board - the down side to that is I'd just have to deal with a similar situation at a later date), so what ARE the options for a financial illiterate in my boat?

bitsandpieces

nonnyd wrote: »

what ARE the options for a financial illiterate in my boat?

Not sure renting it out is fraud (in the sense of being a crime), but you could open yourself up to civil action. As you're in a financially vulnerable situation anyway, it's not a good idea.

You say you'd like to move to Bristol. Is staying put for a bit and saving every penny possible an option? Of course, property prices may fall further as well as rise.

You should speak to the housing association, if you haven't already. See if they can suggest anything to help or be at all flexible in terms of renting.

Speak to National Debtline, CAB or another charity about how best to manage the negative equity. You may be able to sell and negotiate a reasonable payment plan.

Chris_N_3

I had a similar situation where I had to move for work, but couldn't afford to sell the flat.

I explained the situation to the HA and they gave me permission to rent it out for a year. Three months before the end of this period of permission I put the flat on the market (the valuation had gone up a bit, enough to not be in negative equity) but now six months has passed without a sale.

I've continued to let the flat - the HA know this but have not said anything, which I have taken as turning a blind eye. Not a great situation to be in but I'm struggling to find another option.

poppy10_2

nonnyd wrote: »

I'm not sure it would have been so horrendous had I stayed with my partner.

What if if you had stayed together and started a family, and needed to move to a bigger house? Or if you had stayed together but had to move to another part of the country for work? What if some awful neighbours had moved in and you needed to get away?

Shared ownership traps you in crappy starter flats with a maze of rules and regulations governing what you can and can't do with a property that you supposedly own. Shame you had to learn the hard way, but I didn't mean any offence with the financially illiterate comment

Would be worth speaking to the housing association as suggested above - they may be amenable to you renting it out for a limited time (usually 6-12 months max) if there are specific circumstances that warrant it. Best of luck.

nonnyd

Just wanted to say a quick thank you to everyone who replied. I am going to contact the HA, so fingers crossed they'll let me rent it. I'm also oing to invest in spending some time with a financial advisor, which should help me be more confident about any decisions I make.

Paul_the_Painter

Be careful how you word your request.

Moving to Bristol due to your job = good

moving to Bristol due to a change in circumstances (e.g.new partner living there with a job there) = good

Fancy moving to Bristol = not that good!

smp77

I bought a house with my ex husband under a keyworker loan. We borrowed £20k as a deposit and got a 3 bed house. Two years later he did the dirty and we had to sell. It actually caused more stress selling the house knowing we had to pay it back plus some as the value had increased...it was not the best decision I made going for the loan and wish I had never done it! I personally would sell and start again!

mummytofour

I would get shot of it.
Plus S/O is supposed to be for those that are in housing need and to get them on the housing ladder, not as a buy to let cash cow.

Sorry if it sound harsh, I lived in S/O for 7 years something I kind of regrett but it did give me a roof, nothing else tho, apart from a hell of a lot of agro.
I hope you get it sorted.