Shared Ownership Private Scheme

FFD_2

Can anyone help with some advise on this?

I've recently become involved in a shared ownership scheme that is not ran by a housing association but a private company. We had agreed to buy 50% of the property and about to exchange contracts.

Everything was running relatively smoothly until our lender who had made an offer realised that as the company was not a Registered Social Landlord they were not able to go ahead with the mortgage. After much discussion the lender has honoured their original offer to us but told us they won't be accepting any further applications on the scheme.

Our solicitor has strongly advised us not to proceed with the contracts as when we come to sell no one will be able to get a mortgage to buy the property off us and we'll be stuck paying the rent and mortgage on it.

Has anyone had similar experience with a privately owned shared ownership company and what is the likelihood of lenders changing their policies as more of these schemes come up?

At the moment we're not too sure what to do as it's a great flat but too risky to become involved in perhaps.

dmg24

I looked at a shared ownership scheme run by a private builder, and had no problems when I enquired about mortgages. I ended up getting a full mortgage instead, but there are several people on my development who are on the SO scheme, so I assume they were ok for a mortgage?

Private shared ownership is becoming more common, so I would assume that in time more lenders will be ok with it. I bought housing association shared ownership eight years ago, and you would not belief how few lenders would even consider that at the time!

Good luck with your purchase. Let us know what you decide x

liz105

I have a shared equity scheme, whereby we own 75% but don't pay rent on the remaining 25%, its held in trust for us, (its a private agent again like yours). We bought Nov 2005 with a mortgage from Abbey but heard a rumour that we were the last ones they did a mortgage on. Halifax also pulled out on a friend who are in the same scheme. It was getting touch and go with the developers (at the time Westbury) who were having meetings with high level bank management. It did all work out in the end, and there are more of the same flats of ours being completed on at the moment so the mortgages are out there, (there were/are 30 in total). In saying that, check your contract throughly, as you may be able to sell the flat as 100% to the next buyer if the agent is happy to come out of the deal.

Also, check your contract for selling, as we have to give the freeholder 30 days notice for them to nominate a buyer under the Shared Ownership Scheme. This could leave you in the dark if you needed to move quickly.

FFD_2

Thanks for the feedback guys.
It's driving me crazy as I just can't tell how many lenders will be willing to be involved with a non RSL private SO scheme when we sell it in the future.

It's a great property but going against the solicitor's firm advice doesn't feel great.

I can't tell if we're onto something good or disastrous.