NI Co-Ownership Housing Scheme - I need out!

Birdie23

Hi

Need some advice please - if anyone here can give me any answers it would be most appreciated.

OH and I bought our house in July 2007 for £220k - just before the bubble burst! We went 65/35 with NICHA. The house is now worth £130k approx . The outstanding balance on our mortgage is approx £130k so in theory if we handed back the keys to the lender in the morning we wouldn't owe them any money - at least I hope not anyway. But what about the NICHA are we liable to them for 35% of £130k or worse still £217k?

We're under a bit of pressure financially and are considering moving to England where my husband is guaranteed a job but with the housing market the way it is we are totally stuck!

Again any advice would be much appreciated. Thank you.

drew2k9

i think how it works is you are stuck in oweing them the money you did when you bought it in 2007, but not 100%sure, will ask a friend who works there and get back to you!

the housing market is a danegrous thing, and you might just have to bite this bullet, and stay here, miss the job opportunity and its all because you signed into an agreement you may be stuck in for the duration.

neveranymoney

I'm not too sure about your situation, we sold our house in 2006 and co-ownership owned about 35% and the house had increased by almost 100k from when we bought it and they took their percentage from that, so effectively they got more than what they put in ifykwim. I would imagine that it would be the same for you, that they get 35% of what the house is valued at, as they sent their own valuer (who was independent, just hired by them) out when we were selling. Give them a ring, they are usually very good.

NAR

Surely Birdie23 the answer is going to be contained in your contract papers.

BigAl94

Roughly speaking, if you sell at £130K you get 65% of that = £84500 so you have a shortfall of £45.5K to clear your £130K mortgage. No good news I'm afraid.

tara747

Are you allowed to rent out your house if you go away?

Co-Ownership always struck me as very risky tbh, sorry you are in this mess OP. Hope things work out for you.

drew2k9

still havent had word back from my friend re your situation, but as someone else said, its always better to ring them and speak to them about your situation.

at the end of the day though, they will be wanting the money they are entitled to, so again, probably no good news, only the inevitable.

mypie

in your case Co-ownership owns 35% of your house therefore 35% of what it is valued or would sell atm. Effectively co ownership will have made a loss along with you in buying a share of your house.

x12yhp

I am unsure but there is the possibility that the OP is obliged to pay back the 'share' at least in full. That does not mean 35% of the present value, it means the number of £s initially borrowed i.e. £77k. I did have discussions about the matter some years ago and was left with this understanding and it was one very good reason that I was very strongly against the schemes (notably because I believed a fall was inevitable and the scheme was a crucifix in that case).

I am also aware that, in the case of market gains, the scheme retains a percentage value (so the scheme gains with the market), so I may be wrong. Fingers crossed I am.

mypie

x12yhp wrote: »

I am unsure but there is the possibility that the OP is obliged to pay back the 'share' at least in full. That does not mean 35% of the present value, it means the number of £s initially borrowed i.e. £77k. I did have discussions about the matter some years ago and was left with this understanding and it was one very good reason that I was very strongly against the schemes (notably because I believed a fall was inevitable and the scheme was a crucifix in that case).

I am also aware that, in the case of market gains, the scheme retains a percentage value (so the scheme gains with the market), so I may be wrong. Fingers crossed I am.

Its def the precentage of the current market value regardless of the decrease or increase of the value. I know of people that have gained and then others that have lost with the scheme.

x12yhp

mypie wrote: »

Its def the precentage of the current market value regardless of the decrease or increase of the value. I know of people that have gained and then others that have lost with the scheme.

Ok! Apologies then... had i been writing the terms I definitely would have made sure that I wasn't exposed to drops - looks like the public sector has dropped the ball big time in offering this scheme at the worst possible time with no apparent limit on their losses! Good news for the OP though!