Help - cannot sell Section 106 Affordable home

Mr_Hoppy_2

I have a section 106 affordable home. It is an apartment 2 bedroom. The s106 states i can only sell at 80% current Market Value. Also ties in is that it has to be offered to Key Workers for the first 3 months.

I had a potential buyer but he was put off because only one mortgage lender would lend due to the s106 terms. This was Nationwide. Apparently all other Lenders are washing their hands of such schemes. Does this mean I will never sell my apartment.

*this is not a shared ownership, shared equity, housing association sheme. I own 100% of the apartment. I purchased it at a 20% discount and have to sell at 20% discount of current market value.*

Anybody with help, experience or suggestions please...

Crinz

we do them at halifax. not going to help you selling as such but your Estate agent could point potential buyers in the direction of the correct lenders

Mr_Hoppy_2

It seems unfair that Mortgage Lenders are so afraid of these schemes when they are Goverment / Local Authority led. How can there be schemes set up with no financial support or backing from the High Street Lenders. The restrictions set by section 106 only seems to restrict me from selling and people from buying altogether. Is this not having an adverse effect on the area.

Mr_Hoppy_2

Thanks Crinz. Ever had any joy with Barclays Woolwich?

poppy10_2

Mr_Hoppy wrote: »

The restrictions set by section 106 only seems to restrict me from selling and people from buying altogether. Is this not having an adverse effect on the area.

Presumably you knew about the restrictions when you bought the property, and still chose to proceed?

saverjustice

You should have been warned of the difficulties by the local authority, your solicitor and anyone else in the advice chain. You may have a valid claim against one or more of them.

I have removed S106 agreements for people and have a few more in the pipeline.

A S106 agreement must have a proper planning function and be fair and reasonable. Some local authorities take a pragmatic view and take them off after 3 months of being unable to sell, others will fight it tooth and nail.

In order to be successful you need evidence that the agreement should be removed.

Conrad

I was talking to a local area manager of a well known lender recently and he was saying the arrears history on these schemes was the worse perfoming category of lending on thier books, much worse than buy to let or self cert. He thought the industry had realised that people are more likely to get into arrears where they had not put thier own savings (deposit) into the property hence why lenders were running scared of such schemes now.

saverjustice

Conrad

This is not shared ownership, this is a 'locals only' or 'key worker' occupancy restriction with a discount to open market value, there are no subsidised deposits/loans or whatever.

The Section 106 obligation is a blunt instrument that the planners and politicians have used to placate those who are screaming about the lack of affordable housing.

Mr_Hoppy_2

Thanks all for your interest in this matter. Yes I did know about the terms on the Lease when I purchased the property BUT I was never informed that this will have an effect on getting a mortgage. I had no idea that High Street Lenders were not willing to offer mortgages on such schemes. The only thing I was told by my solicitor (who were recommended by George Wimpey) was 'these are unusual terms' and that was it. end of.
Let's not forget that the target market for these properties is First Time Buyers, who like, me have never come across anything like this before.

saverjustice

I can sort it out.

Mr_Hoppy_2

Thanks saverjustice, thanks for your advice, I am relectant to proceed with any formal complaint as yet because I am still for sale and wouldn't want any ongoing complaint to prevent me from selling. I'll see how I go. I have gathered evidence from High Stret Lenders, Independant Finacial Advisors, a local conveyancing solicitor, the Council of Mortgage Lenders (CML) and have notfied my MP so I will soon start putting the pressure on the Local Council.
I was wondering if anybody had a quick term solution or new of any other lenders. As I am not the only one in the predicament and there is roughly 50 apartments on the estate under these terms I would probably need to rally up a few more people too as I doubt a Council would change a Lease Clause for 1 person and not all of us. Saverjustice, I will bare you in mind and have Bookmarked your site.