Selling a shared ownership flat.

Flibertigibit

Has anyone got recent experience of selling a shared ownership flat? I currently live in one where I own 35% outright and pay rent on the remaining 65%. I have been offered and have accepted a sheltered flat and the HA with whom a share the ownership of my present flat, have agreed that I can sublet it for up to a year, so long as it is up for sale at the same time.

Of course the HA can lay down conditions which they have, one of which is that I have to have a valuation done by a RICS qualified person, which I believe will cost around £165. Also, if I do go ahead and sublet (which I'll have to do as I can't afford two rents every month) I have to give them £75 (not sure why!), am limited to the kind of tenant I can have and also the rent I can ask for.

I'm quite scared of letting out my flat because you hear some awful stories of people trashing places (a minority I'm sure) and I also worry that having tenants might put off prospective buyers. Because of this, I'm thinking of just putting it on the market for now, somehow finding the money for two rents and seeing what happens buyer-wise for 3 months.

Is this a sensible thing to do or are the chances of me selling the property at this time of year and in the current climate so low I'd be best getting a tenant in quickly? That won't be a problem I'm sure as the rent will be much less than the market rent for a similar two bed flat.

And finally, I have heard that it's very difficult to get a mortgage for shared ownership. Does anyone know if that is true? And does the fact that I only have a 35% share (less than the more common 50%) mean it's more or less likely to sell?

Thanks in advance to all who answer. This forum is a godsend for people like me who are on their own and have nobody to chew the fat over with when making big decisions.

Richard_Webster

Presumably you have asked the HA and they don;'t have anyone interested in buying the 35%?

Flibertigibit

Richard_Webster wrote: »

Presumably you have asked the HA and they don;'t have anyone interested in buying the 35%?

It would seem not as they have told me how to put it on the open market. It's all very different to when I sold a shared ownership house in 2007 with a much larger HA - then I had to fight off buyers who were on their waiting list and after a hectic weekend had to decide who to sell it to out of about 10 couples who really wanted it!! Of course that was a different market and it was a "family sized" house which I gather is much rarer and therefore more desirable. I think there are plenty of flats available at the moment in what is a very depressed market.

Richard_Webster

So are you trying to sell the 35% or will the HA let you "buy in" the 65% and then immediately sell 100% on to a buyer (using buyer's money to buy in 65%)? I ask that because a lot of SO leases have wording in that means that you have to own the 100% for at least 3 months before you can sell it on.

PasturesNew

What sort of figures are we talking here for value/rent?

Flibertigibit

Richard, I'll look into this when I have time to re-read the lease. To be honest I'm not quite sure what you mean as my brain is a bit addled at the moment. But I would have thought that the HA would not have sent me all the info about how to go about selling if what you suggest was the case.

PasturesNew - the official valuer that the HA say I must have is coming tomorrow, but I did an on-line one and it came in at £98,000. This seems quite possible as I bought it for £125,000 in Nov 2007 (the height of the boom!!). I currently pay £267 a month for rent and services combined, which I reckon must be pretty low for a really nice 2 bed flat with allocated parking on the open market? I am allowed to charge a bit more (10%) to cover the rental agency charges, making a grand total of £293.70 per month.

mrsdarbs

Snap! I am in a very similar situation to yourself - although I moved into Army accomodation when I married my husband.

I bought my SO 2 bed flat in March 2007 for £115,000, I have a mortgage for 55%. I tried to sell at the end of 2008, but they didn't have any one interested on their list and said I could put it on the open market. I chose not to and sought permission to rent instead, which I have been doing since June 2009. It has been a nightmare with tenants - not trashing it, but getting paid on time etc. I have an agent in place, but the tenant has had medical problems which meant he hasn't worked since Christmas - he was on full pay for a while so all was fine, but then that finished and he had to seek financial help from the council and the last month I got paid properly was May - ever since then it's not been paid on time and of varying amounts! Not trying to scare you, but just illustrate what can happen.

I am not allowed to make a profit on the property but am allowed to charge a rent to cover my mortgage, the rent/service charge and my agents fee. I'm actually at a loss of about £50 a month, due to changes, but it's better than paying the full lot!!

I would like to sell but the market just isn't strong enough at the minute and I would end up in negative equity - similar properties in the area are going for just under £100k. The HA I am with for the SO does not make me staircase to 100% before I sell I just have to get it valued by one of their agents at a cost of about £125, then give them 3 months to attempt to find a buyer from their lists before I go on the open market. i'm hoping next year the market will pick up.

stu69

Flibertigibit wrote: »

Has anyone got recent experience of selling a shared ownership flat? I currently live in one where I own 35% outright and pay rent on the remaining 65%. I have been offered and have accepted a sheltered flat and the HA with whom a share the ownership of my present flat, have agreed that I can sublet it for up to a year, so long as it is up for sale at the same time.

Of course the HA can lay down conditions which they have, one of which is that I have to have a valuation done by a RICS qualified person, which I believe will cost around £165. Also, if I do go ahead and sublet (which I'll have to do as I can't afford two rents every month) I have to give them £75 (not sure why!), am limited to the kind of tenant I can have and also the rent I can ask for.

I'm quite scared of letting out my flat because you hear some awful stories of people trashing places (a minority I'm sure) and I also worry that having tenants might put off prospective buyers. Because of this, I'm thinking of just putting it on the market for now, somehow finding the money for two rents and seeing what happens buyer-wise for 3 months.

Is this a sensible thing to do or are the chances of me selling the property at this time of year and in the current climate so low I'd be best getting a tenant in quickly? That won't be a problem I'm sure as the rent will be much less than the market rent for a similar two bed flat.

And finally, I have heard that it's very difficult to get a mortgage for shared ownership. Does anyone know if that is true? And does the fact that I only have a 35% share (less than the more common 50%) mean it's more or less likely to sell?

Thanks in advance to all who answer. This forum is a godsend for people like me who are on their own and have nobody to chew the fat over with when making big decisions.

I am in a similar situation. My HA *Thames Valley Housing) allowed me to sub let my property, i was not allowed to make any profit.

6 months into the 1st year and my HA upped my rent, it now costs me money to sub let my flat. I have had to enter a 2nd year of sub lettiing and was unable to increase the rent and we were already at the market value in our area. My HA say they can not put there rental charges down event though they exceed the market value.
Add to that they increase our managment fees all the time and under estimate the already over priced ground rent etc so manage to consistantly hit us with extra bills to the tune of £250 - £300. (Every year since i entered the scheme in 2004ish)

Trying to sell is impossible, Last year i paid to have RICS qualified person value the flat and they undervaled it considerably compared to the independant valuations i had done. Apparently i can only sell to what the RICS people say, even though the independant guys say its drastically undervalued.

I have no idea what to do, pretty desperate times for me as my set mortgage rate expires next year so i have to sell, just have to choose weather to walk away with massive negative equity debt or hand the keys over and ruin my credit rating, neither appealing with a young family to provide for.

Buying a shared ownership has been my biggest regret.

poppy10_2

stu69 wrote: »

I am in a similar situation. My HA *Thames Valley Housing) allowed me to sub let my property, i was not allowed to make any profit.

6 months into the 1st year and my HA upped my rent, it now costs me money to sub let my flat. I have had to enter a 2nd year of sub lettiing and was unable to increase the rent and we were already at the market value in our area. My HA say they can not put there rental charges down event though they exceed the market value.
Add to that they increase our managment fees all the time and under estimate the already over priced ground rent etc so manage to consistantly hit us with extra bills to the tune of £250 - £300. (Every year since i entered the scheme in 2004ish)

Trying to sell is impossible, Last year i paid to have RICS qualified person value the flat and they undervaled it considerably compared to the independant valuations i had done. Apparently i can only sell to what the RICS people say, even though the independant guys say its drastically undervalued.

I have no idea what to do, pretty desperate times for me as my set mortgage rate expires next year so i have to sell, just have to choose weather to walk away with massive negative equity debt or hand the keys over and ruin my credit rating, neither appealing with a young family to provide for.

Buying a shared ownership has been my biggest regret.

Sadly yet another example of how shared ownership is a scam.