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Frustration with Shared Ownership - Lack of Information and Knowledge
Ihatesharedowner
Posts: 3 Newbie
My husband and I are in a very fortunate position where we are able to staircase and buy the remaining half of our shared ownership property after 4 years.
However, we are experiencing numerous problems and are deeply frustrated by the lack of support, understanding and communication from all the parties concerned and the problems with Shared Ownership that have only just reared their head because we've looked at the finances. I don't know where to turn for help, or to make others aware of some of the problems we have faced.
We contacted the Housing Association in response to an advert offering a free valuation and money towards legal fees. During the conversation the woman told me a desktop valuation which nearly made me cry and was deeply distressing - it was £50k less than the full value of the property we bought and would have put us massively into negative equity. We were later told this initial desktop valuation was based on their insurance to give a rock bottom value to their assets and should never have been given to us. When I questioned it, she did go away and suggested a price that was more likely but still below what we expected (and below our eventual valuation). She never gave me any other understanding of the process, deadlines, and even suggested that we use Gocompare.com to find our mortgage. All in all, deeply unprofessional. In spite of this we decided to go ahead with a valuation, because we want to cut our losses, get away from dealing with them, paying rent and give ourselves options to either sublet or rent out due to changes with my husband's job.
After going backwards and forwards over a number of weeks due to them never being in the office, responding to emails or answering phone calls, we eventually got the valuation. It was about £5k (on total value of the house) less than the minimum price that we had hoped for, making it extremely difficult for us to consider buying the house, due to the deposit (Stupidly due to the way equity works a higher price would have made it easier for us to buy!). The valuation report we were sent, also missed off a lot of details about the house, and even had a page missing! It was only at this point that we got for the first time, details of deadlines which we had no indication of previously but still no idea of the process we need to take - it was more or less, we tell you when you get to this point what you need to do next rather than a full overview. Given the process is different and more complicated to normal house sales, we felt left in the dark about it all.
We've actually complained to them about it all and did get to see the MD. We raised the issue over staff being poorly trained about the process, being unprofessional, being given incorrect information, the lack of information we have had and how difficult, how long it is to get in touch with anyone and how much extra stress this was causing. He was sympathetic and seemed to listen, but we still feel frustrated as we are still having a lot of the same problems. Reading around shared ownership horror stories, I feel our association is above average but this is still poor. They are too focused on their rental only tenants, or selling new shared ownership properties and have no interest in us.
On the whole we feel very let down by how Shared Ownership has worked for us. I still feel it is right and appropriate for some people and is a good way to solve a lot of issues with housing, but I can't help feel that it is being greatly mis sold, to a large number of people who don't fully understand it, and even not for profit housing associations, like ours, who are supposed to be acting in the interests of their tenants lack the knowledge required to genuinely help people. Certainly there does need to be a great deal more protection for tenants in law. I feel there is a real danger this has the potential to be a problem not disimilar to endowment mortgages.
We felt we did our homework. Shared Ownership was a low risk option for us - if the value of the house went up, great, if it went down it wasn't so bad as we didn't loose as much. If we wanted to staircase if our incomes went up, it was easy. We even checked out that our housing association was not for profit so would be more inclined to act in our best interests.
What we didn't account for was the change in deposits and 100% mortgages no longer being available being such a huge problem for us. In fairness anyone who bought after the end of 2008 when they disappeared is unlikely to have as many issues as we have. We have worked out that had we rented for the past four years, given the way we have planned financially we would be significantly better off (to the tune of about £15 - 20k) and would now be able to put down a deposit on a property of the same value with ease. Instead we have be forced to ask parents for a loan to cover our fees.
I need to stress that all this is despite our household income increasing by over 50% in 4 years, having saved, having put a 10% deposit down initially on our share, over paid our mortgage, having a perfect credit history and a mortgage with the same terms being only slightly higher per month (about £80) than our current rent and mortgage combined. On top of that we have now discovered that despite technically still being first time buyers, we are liable for stamp duty when we buy over the £125k threshold in our home.
How anyone who hasn't been as fortunate as us will ever be able to staircase, in the face of rents rising above inflation is beyond me. Remembering that we are possibly unusual for people buying shared ownership prior to 2008 because we did have a 10% deposit. Whilst anyone who bought for the first time at the same time as us, is likely to have the similar issue even if they bought a full property, shared ownership buyers are at a significant disadvantage if their circumstances change or they are unable to sell, because they can't rent the property or sub-let a room if they need to. Its a real trap. The government should not be pushing shared ownership until some of the legal issues are addressed and more flexibility is available to help shared ownership buyers, should they wish to move or staircase. They desparately need to help to raise awareness with solicitors and mortgage lenders as at the moment its appalling how little they know.
Our staircasing experience is proving a nightmare. We got the valuation based on us providing a letter of mortgage in principle with 15% deposit from another provider as we couldn't get a response from our current lender Nationwide (not returning messages, calls or requests for information). When they did get back to us, they could only offer a 15% deposit too. We eventually did find YBS would offer us a mortgage with a 10% deposit. Its worth noting all three lenders have seen our figures and have commented in shock at our position as on paper we are perfect customers, who are low risk and have proven history of good financial management.
We put down a deposit on the YBS mortgage with assisted legal fees to switch the mortgage across. We asked at the time, that since it was shared ownership and we had already been in touch with our own solicitor whether we would still need them or not. We had an email a week later saying that we would need our own solicitor in addition to theirs. Another week passes, and we get the forms from their solicitor. Looking through them they didn't seem appropriate for shared ownership, so we got in touch with them only to be told they couldn't deal with us because its shared ownership contrary to what our mortgage adviser had told us. We've been trying to get a response from her for over 2 and a half weeks about this to no avail. Even though she's emailed to ask us to get us to supply a letter from the housing association. We are starting to feel like we have been mis sold this mortgage as being inappropriate for our needs, though if we get one of their alternative packages we have to reapply and will either get stuck with a higher interest rate or have to put down even more in fees we can't afford (in addition to the extra legal fees we now find ourselves landed with).
In the meantime now had another letter from the housing association, being quite aggressive about the deadline (which is less than a month away now, with all the messing about). We have tried to get in touch with them over several issues and again, we can't get through to anyone. We have been warned that if we go past the deadline, we have to pay for another valuation. And if this valuation is less favourable we will no longer be able to purchase the house due to our equity being wiped out and not having enough money for the deposit. The stupid thing is, forcing another valuation isn't in anyone's interests right now; the housing association have told us they only make a profit when tenants staircase, if they revalue at a lower price they get less, if they revalue at a lower price we can't buy the house and won't be able to look at doing so again for sometime due to the money we've lost, and the bank wouldn't even consider lending us the money if the valuation they did was wildly out anyway!
We have responded to everything promptly and have been proactive in our questions and research and stressed the deadline to them. Its just that everyone has dragged their feet and frozen in horror every time you say the word shared ownership. No one seems to know what they are doing, and they certainly aren't talking to us, even if they are talking to each other. There are so many parties involved who aren't really interested in moving forward even when we are trying to apply pressure. The longer it goes on, the more I want to just wash my hands of shared ownership.
I would love to know if there is anywhere out there that does offer genuine, impartial and comprehensive advise on the trials, pitfuls and things to be aware of with shared ownership as none of the websites I've seen truly do that. I haven't found much in the way in newspaper coverage of the subject either - and with the small, but growing number of people entering the market as its pushed as a solution to housing problems, it does need wider reporting as it is a political issue. The purpose of shared ownership is supposed to be a way of helping those at the bottom of the housing market. To our cost, we have found out the hard way that renting would have been a lot more financially sound; something seems very wrong if that is the case. Certainly staircasing seems to be a very neglected area and I really don't understand the logic about why we should have to pay stamp duty on our first house when someone who buys in one chunk doesn't have to. And I don't know where we stand legally with all the messing around which looks like it has the potential to put us out of pocket by thousands and unable to buy our property.
Any advice, comments or similar experiences would be greatly welcomed. Like I say, I still believe in the benefits of shared ownership, but I feel like guinea pig that unfortunately got the overdose in the drug testing experiment in the such for a new cure for some terrible disease right now.
However, we are experiencing numerous problems and are deeply frustrated by the lack of support, understanding and communication from all the parties concerned and the problems with Shared Ownership that have only just reared their head because we've looked at the finances. I don't know where to turn for help, or to make others aware of some of the problems we have faced.
We contacted the Housing Association in response to an advert offering a free valuation and money towards legal fees. During the conversation the woman told me a desktop valuation which nearly made me cry and was deeply distressing - it was £50k less than the full value of the property we bought and would have put us massively into negative equity. We were later told this initial desktop valuation was based on their insurance to give a rock bottom value to their assets and should never have been given to us. When I questioned it, she did go away and suggested a price that was more likely but still below what we expected (and below our eventual valuation). She never gave me any other understanding of the process, deadlines, and even suggested that we use Gocompare.com to find our mortgage. All in all, deeply unprofessional. In spite of this we decided to go ahead with a valuation, because we want to cut our losses, get away from dealing with them, paying rent and give ourselves options to either sublet or rent out due to changes with my husband's job.
After going backwards and forwards over a number of weeks due to them never being in the office, responding to emails or answering phone calls, we eventually got the valuation. It was about £5k (on total value of the house) less than the minimum price that we had hoped for, making it extremely difficult for us to consider buying the house, due to the deposit (Stupidly due to the way equity works a higher price would have made it easier for us to buy!). The valuation report we were sent, also missed off a lot of details about the house, and even had a page missing! It was only at this point that we got for the first time, details of deadlines which we had no indication of previously but still no idea of the process we need to take - it was more or less, we tell you when you get to this point what you need to do next rather than a full overview. Given the process is different and more complicated to normal house sales, we felt left in the dark about it all.
We've actually complained to them about it all and did get to see the MD. We raised the issue over staff being poorly trained about the process, being unprofessional, being given incorrect information, the lack of information we have had and how difficult, how long it is to get in touch with anyone and how much extra stress this was causing. He was sympathetic and seemed to listen, but we still feel frustrated as we are still having a lot of the same problems. Reading around shared ownership horror stories, I feel our association is above average but this is still poor. They are too focused on their rental only tenants, or selling new shared ownership properties and have no interest in us.
On the whole we feel very let down by how Shared Ownership has worked for us. I still feel it is right and appropriate for some people and is a good way to solve a lot of issues with housing, but I can't help feel that it is being greatly mis sold, to a large number of people who don't fully understand it, and even not for profit housing associations, like ours, who are supposed to be acting in the interests of their tenants lack the knowledge required to genuinely help people. Certainly there does need to be a great deal more protection for tenants in law. I feel there is a real danger this has the potential to be a problem not disimilar to endowment mortgages.
We felt we did our homework. Shared Ownership was a low risk option for us - if the value of the house went up, great, if it went down it wasn't so bad as we didn't loose as much. If we wanted to staircase if our incomes went up, it was easy. We even checked out that our housing association was not for profit so would be more inclined to act in our best interests.
What we didn't account for was the change in deposits and 100% mortgages no longer being available being such a huge problem for us. In fairness anyone who bought after the end of 2008 when they disappeared is unlikely to have as many issues as we have. We have worked out that had we rented for the past four years, given the way we have planned financially we would be significantly better off (to the tune of about £15 - 20k) and would now be able to put down a deposit on a property of the same value with ease. Instead we have be forced to ask parents for a loan to cover our fees.
I need to stress that all this is despite our household income increasing by over 50% in 4 years, having saved, having put a 10% deposit down initially on our share, over paid our mortgage, having a perfect credit history and a mortgage with the same terms being only slightly higher per month (about £80) than our current rent and mortgage combined. On top of that we have now discovered that despite technically still being first time buyers, we are liable for stamp duty when we buy over the £125k threshold in our home.
How anyone who hasn't been as fortunate as us will ever be able to staircase, in the face of rents rising above inflation is beyond me. Remembering that we are possibly unusual for people buying shared ownership prior to 2008 because we did have a 10% deposit. Whilst anyone who bought for the first time at the same time as us, is likely to have the similar issue even if they bought a full property, shared ownership buyers are at a significant disadvantage if their circumstances change or they are unable to sell, because they can't rent the property or sub-let a room if they need to. Its a real trap. The government should not be pushing shared ownership until some of the legal issues are addressed and more flexibility is available to help shared ownership buyers, should they wish to move or staircase. They desparately need to help to raise awareness with solicitors and mortgage lenders as at the moment its appalling how little they know.
Our staircasing experience is proving a nightmare. We got the valuation based on us providing a letter of mortgage in principle with 15% deposit from another provider as we couldn't get a response from our current lender Nationwide (not returning messages, calls or requests for information). When they did get back to us, they could only offer a 15% deposit too. We eventually did find YBS would offer us a mortgage with a 10% deposit. Its worth noting all three lenders have seen our figures and have commented in shock at our position as on paper we are perfect customers, who are low risk and have proven history of good financial management.
We put down a deposit on the YBS mortgage with assisted legal fees to switch the mortgage across. We asked at the time, that since it was shared ownership and we had already been in touch with our own solicitor whether we would still need them or not. We had an email a week later saying that we would need our own solicitor in addition to theirs. Another week passes, and we get the forms from their solicitor. Looking through them they didn't seem appropriate for shared ownership, so we got in touch with them only to be told they couldn't deal with us because its shared ownership contrary to what our mortgage adviser had told us. We've been trying to get a response from her for over 2 and a half weeks about this to no avail. Even though she's emailed to ask us to get us to supply a letter from the housing association. We are starting to feel like we have been mis sold this mortgage as being inappropriate for our needs, though if we get one of their alternative packages we have to reapply and will either get stuck with a higher interest rate or have to put down even more in fees we can't afford (in addition to the extra legal fees we now find ourselves landed with).
In the meantime now had another letter from the housing association, being quite aggressive about the deadline (which is less than a month away now, with all the messing about). We have tried to get in touch with them over several issues and again, we can't get through to anyone. We have been warned that if we go past the deadline, we have to pay for another valuation. And if this valuation is less favourable we will no longer be able to purchase the house due to our equity being wiped out and not having enough money for the deposit. The stupid thing is, forcing another valuation isn't in anyone's interests right now; the housing association have told us they only make a profit when tenants staircase, if they revalue at a lower price they get less, if they revalue at a lower price we can't buy the house and won't be able to look at doing so again for sometime due to the money we've lost, and the bank wouldn't even consider lending us the money if the valuation they did was wildly out anyway!
We have responded to everything promptly and have been proactive in our questions and research and stressed the deadline to them. Its just that everyone has dragged their feet and frozen in horror every time you say the word shared ownership. No one seems to know what they are doing, and they certainly aren't talking to us, even if they are talking to each other. There are so many parties involved who aren't really interested in moving forward even when we are trying to apply pressure. The longer it goes on, the more I want to just wash my hands of shared ownership.
I would love to know if there is anywhere out there that does offer genuine, impartial and comprehensive advise on the trials, pitfuls and things to be aware of with shared ownership as none of the websites I've seen truly do that. I haven't found much in the way in newspaper coverage of the subject either - and with the small, but growing number of people entering the market as its pushed as a solution to housing problems, it does need wider reporting as it is a political issue. The purpose of shared ownership is supposed to be a way of helping those at the bottom of the housing market. To our cost, we have found out the hard way that renting would have been a lot more financially sound; something seems very wrong if that is the case. Certainly staircasing seems to be a very neglected area and I really don't understand the logic about why we should have to pay stamp duty on our first house when someone who buys in one chunk doesn't have to. And I don't know where we stand legally with all the messing around which looks like it has the potential to put us out of pocket by thousands and unable to buy our property.
Any advice, comments or similar experiences would be greatly welcomed. Like I say, I still believe in the benefits of shared ownership, but I feel like guinea pig that unfortunately got the overdose in the drug testing experiment in the such for a new cure for some terrible disease right now.
0
Comments
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Sounds like an awful experience. Sorry I can't offer any advice, but I have added a link to the long-running "shared ownership is a scam" thread on this forum.poppy100
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Sums up Shared Ownership.They are too focused on their rental only tenants, or selling new shared ownership properties and have no interest in us.
P.S. Raise your issues with your MP.0
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