Shared ownership lease unfair?

rendi

We have been shared owners for nearly 16 years - house prices rocketed just after purchase and we have not been able to buy the other half yet. We have been responsible for all costs but if we want to buy the other half we have to pay full market price - how can this be fair? Is there anyway we can challenge the terms of the lease - should our solicitor have pointed out the pitfalls? Also, service charge has now been removed from our rent (we never received any service anyway) but there has been no explanation and the rent has still gone up as normal. Any ideas, anyone?

theartfullodger

Yes, as posted many times, these "shared ownership" deals are widely considered a scam, sorry.

One point: had prices dropped...

if we want to buy the other half we have to pay full market price - how can this be fair?

is that fair??

pinkshoes

In what way is it unfair? If you wanted to benefit from the price rise of owning a full house, then you had the chance to buy a whole house.

Likewise, if prices had dropped in 16 years, then you would have benefited from only half the price drop.

If you didn't feel this was unfair, why did you sign up 16 years ago?

purplelila-2007

There are so many pitfalls to shared ownership - they are such a scam .

It wasn't the solicitors responsibility to point out the pitfalls , they were carrying out the conveyancing for you , it's your responsibility to reasearch shared ownership prior to entering into it.

Again another pitfall of shared ownership is that it has all the pitfalls of homeownership with none of the benefits - so yes you would be fully responsible for repairs to your home - aside from the communal bits.

As for the rent going up , have a look at your lease it should mention what criteria they use when deciding whether or not to increase rent.
They can increase it as much as they like within reason , because you are technically 'renting as tenants' the % of your home you do not own.

Blacksheep1979

I presume that when you come to sell the property you won't be keeping the 'unfair' rise in property price to yourself but will be selling at a discount to the buyer?

Jeffrey_Shaw

purplelila-2007 wrote: »

There are so many pitfalls to shared ownership - they are such a scam .

No, they're not. P [purchaser] gets a fractional property purchase at a fractional price. Why's that unfair?

poppysarah

Jeffrey_Shaw wrote: »

No, they're not. P [purchaser] gets a fractional property purchase at a fractional price. Why's that unfair?

And thus prevents prices falling sensible and them being able to afford to buy a whole house.

puddy

but if you bought your share 16 years ago, i presume you have enourmous equity in the 50% you own, why dont you re mortgage, or isnt that how it works with SO?

Mandog

I'm not sure what you mean, Rendi, by 'service charge has been removed from the rent'. It's usual to pay a service charge (in private rented as well as HA run flats) and if you're not paying it presently it may be a mistake. I'd give them a call as they'll notice eventually.

I sympathise with your frustration but you knew what you were signing up to. You couldn't foresee the massive property boom but people are burnt by property fluctuations all the time - read the boards for sad tales. You have a home you seem to want to live in and which you couldn't otherwise afford, so you're better off than many.

Purpleleila, it's not true that the LL can increase the rent as much as they like on the unowned share. My rent is limited to 1% above RPI and that's usual for these schemes. The rent was subsidised to start with and 10 years later is about 50%-60% of market value rents in my neighbourhood.

Mandog

puddy wrote: »

but if you bought your share 16 years ago, i presume you have enourmous equity in the 50% you own, why dont you re mortgage, or isnt that how it works with SO?

OP stated that prices have rocketed since he/she bought the first share. I'm in a similar situation, I'll have to nearly pay off the first 50% before the multiples of salary will add up to enough for the next 50%.

puddy

i dont understand how these things work

lets say property was 100k, so OP bought 50% share (50k) with a mortgage of lets say 40k?


property has doubled in price so now worth 200k, means that OPs share is 100k, mortgage now outstanding of (pure guesswork here) 20k?

so she owns 100k worth of property and has 80k equity in it?

is that right? to buy the other 100k of it then she needs to put down 10% deposit which is 10k (which she has in equity) and borrow 90k?