Shared Ownership - problems

Richard_Webster

I agree Bargain rzi.

£125,000 market value means NO SDLT!

means the value of the 100% rather than the amount actually paid for the share.

So in a disadvantaged area you rightly say that opting for paying SDLT on the market value means that you pay no tax on a purchase of a shared ownership flat whose market value is £145,000.

Obviously you could decide to pay tax on the share bought but in this case it would be silly!

As a conveyancing solicitor I believe this may be helpful and provide pointers for people but I cannot accept any responsibility to anyone other than a paying client.

Bargain_Rzl

Thanks, that really puts my mind at rest!

Two of the eight 1-bed flats in my building were sold as a share of fractionally OVER £150k, so I do feel rather sorry for a couple of my neighbours

Bargain_Rzl

Lynzpower, are you reading this? This is the answer to the question we were debating the other week

Laura2507

I've read this thread with interest as I've just been accepted by HA for the homebuy new build shared ownership scheme.

One thing I've noticed with this thread and a couple of others is that mortgages are being arranged/sourced after a property has been agreed with the HA. I have a rough idea of what I can afford and would be offered so should I just look for a property now and then go into more detail with IFAs and brokers after I've had a property offer from the HA?

I just wouldn't want to get my hopes up on a property to then be told afterwards that i can't get a mortgage for it after all.

Also what is availabilty like for properties, could I be waiting for ages if lots of other people have been accepted? (I'm in Oxfordshire and looking at Banbury)

Thanks!
Laura

Bargain_Rzl

Hi Laura. It doesn't hurt to get a mortgage "approval in principle" through an mortgage broker. Make sure when you first contact the broker's office that you ask to speak to somebody who can advise on shared ownership (it helps to have somebody who knows the market, some lenders won't lend on SO). That way, at least you will know how the numbers stack up.

Then when you are offered an actual property, you can apply formally for a mortgage.

I think it varies from scheme to scheme about being offered properties. For me it worked the other way round - I wasn't signed up to the housing list but I saw a block of flats advertised that was ideal for me, so I put myself on the local (combined London boroughs) housing list, viewed the flat at a group viewing at which wewere told that the applications would be processed on a first come first served basis, and so I made sure I got my application in first Due to solicitor problems with the HA, it took a while (applied in July, moved in November!) but am happily settled now.

lynzpower

Bargain_Rzl wrote:

Lynzpower, are you reading this? This is the answer to the question we were debating the other week

Yep just caught in with it now! Finally, a proper answer- cheers Richard. Ill add this to my faves. It makes complete sense now, my SO place was marketed at 199500- so yes, thats why I paid it.

SarahLouz

I may be going off topic a bit, but we have just had all the paperwork thorugh prior to exchange for our SO flat. Our solicitors originally quoted £1150 for their fee not including stamp duty. Now the paperwork says it will be £1800 ( still without Stamp duty I think) Can Sols add this much on to the original quote. We are going to ask for a breakdown of costs but this seems really unfair. It is a new build flat and there is no chain. I can't see they've even had to do that much for the money! Can anyone else tell me how much you have paid in legal fees. I know it obviously varies from purchase to purchase but just to get some idea if we are being ripped off!

Bargain_Rzl

SarahLouz, when you say "their fee not including stamp duty" was quoted as £1150, did this include disbursements? (Search fees, admin fees, land registry, fees associated with the lease, etc?) These items vary and are beyond the solicitor's control. Surely you can't be paying £1150 (or even £1800) just for the solicitor's fee, which in my case was around £500+VAT if I recall correctly...

SarahLouz

This was the £1150 quote

Purchase M???? & G???? legal charges 595.00
VAT on legal fees 104.13
Stamp Duty **
Stamp Duty Land Tax Form (Inclusive of VAT) 88.13
Land Registry fees 100.00
Local, Drainage & Environmental Search fee (Approx.) 150.00/200.00
Chancel Check fee 11.75
Other search fees 10.00
Bank telegraphic transfer fee 40.00

** Stamp Duty will be £2,025.00 (maximum) and £912.00 (minimum).

So doesn't include anything regarding the leasehold but think includes pretty much everything else.

The exact wording of the doc is we will require a £1800 deposit from you in the form of a banker's draft before we can proceed to exchange contracts. Somebody has said to me this morning that this probably means a deposit for the mortgage and not legal fee & disbursements at all. We are getting a 100% mortgage though, so surely this doesn't apply. My BF is contacting SOls later but just trying to clarify a bit first before we have to phone them and have them charge us for the phone call!!

Can anyone help?

AKK_3

Hi SarahLouz,

I got a mortgage with conveyancing fees included (excluding disembursements). I had to pay £250 upfront for them to get things rolling, and then they sent me a breakdown of costs just before I exchanged contracts. The money I handed over to them included a deposit fee and stamp duty on the share I was buying. I think my lender paid £400-500 towards the solicitor’s fee.

If I remember rightly I think the total for the legal fees could not have been anymore than £900.

Before I agreed to take this mortgage deal, I asked how much the legal costs were going to be and they quoted me a lot less the all the other quotes I had.

The HA recommended a solicitor. I decided not to go with them, because they didn't like me asking questions about costs and implied that I couldn't get a better deal elsewhere.

My advise to you is to get quotes from a few solicitors and then go for the one that offers the best deal.

My solicitor, although it was all over the phone, were really good and very through. It was the HA that posed the problems.

A