Shared ownership dreams shattered

homelessskilledworker

http://www.independent.co.uk/property/house-and-home/property/shared-ownership-dreams-shattered-7878446.html


Tens of thousands of Britons who bought their homes through shared ownership arrangements are struggling to sell them, leaving them in limbo as they are unable to move for work or family reasons.

Many more, who bought at the height of the market boom, are now stuck in negative equity – facing making a loss in order to extricate themselves from shared ownership, according to a damning new report from Cambridge University.

shortchanged_2

It was all too obvious for many of us unfortunately.

The problem in the UK now is far too many people see housing as an investment and shared ownership scams etc are an unfortunate result of this.

CLAPTON

predictable and it was widely predicted

one day we will have to tackle to arbitary unaccountable power of housing associations.

Graham_Devon

It's certainly harder to sell a Shared Ownership property. But the negative equity thing applys to all mortgages properties, so I don't know why so much emphasis is put on the negative equity of the shared ownership home.

Infact, the hartlepool example. If you own 40% of a 100k house, and for ease, you owe 40k on the mortgage, you will be in £8,000 worth of negative equity.

However, if you owned 100% of the 100k home (and for ease had a 100k mortgage) you would be in 20k negative equity.

So all the focus put on negative equity is misdirected. Selling is harder and that's a fair enough focus. It always appears to be those who rushed in, or were ushered into the scheme without doing their research that complain the loudest. The scheme was fine when it allowed them to get a house quickly.

CLAPTON

Graham_Devon wrote: »

It's certainly harder to sell a Shared Ownership property. But the negative equity thing applys to all mortgages properties, so I don't know why so much emphasis is put on the negative equity of the shared ownership home.

Infact, the hartlepool example. If you own 40% of a 100k house, and for ease, you owe 40k on the mortgage, you will be in £8,000 worth of negative equity.

However, if you owned 100% of the 100k home (and for ease had a 100k mortgage) you would be in 20k negative equity.

So all the focus put on negative equity is misdirected. Selling is harder and that's a fair enough focus. It always appears to be those who rushed in, or were ushered into the scheme without doing their research that complain the loudest. The scheme was fine when it allowed them to get a house quickly.

of course you are right about the negative equity situation.

obviously we don't know the details of the scheme

and of course the buyer wasn't to know the way the housing trust will behave when it comes to selling and their willingness to reduce their share of teh price to effect a speedy sale.

there should be a mandatory code of practice

Graham_Devon

CLAPTON wrote: »

and of course the buyer wasn't to know the way the housing trust will behave when it comes to selling and their willingness to reduce their share of teh price to effect a speedy sale.

I dunno, for mine it's all set out. I have to give the association 3 months to market it however they wish, before I can approach selling it on the open market. It's a standard thing as far as I'm aware.

As for the price, it's market price and always market price, no negotiation, whether as a buyer or seller.

CLAPTON

what do you mean 'market price and always market price, no negotiation, whether as a buyer or seller. '?

brit1234

I just wish they would do a panorama/dispatches program highlighting the issues to the wider public. It is a complete scam to prop up prices for builders and traps first time buyers milking the life out of them.

Graham_Devon

CLAPTON wrote: »

what do you mean 'market price and always market price, no negotiation, whether as a buyer or seller. '?

Say the house is valued at 130k by the housing associations valuers. There is no movement on that. The seller has to sell for 130k and the buyer has to buy for 130k. You can't offer 125k as a buyer.

I.e. it's fixed price.

This is, at least, how my scheme, and all schemes I have seen mentioned on the house buying board have worked. There may be other schemes that work differently, but have never heard of them.

On a secondary note, this almost always leads to shared ownership being overvalued.

One of my bugbears on all discussions is keeping the schemes seperate. Shared ownership is just that, buying a percentage of the house on a mortgage, and paying rent on the rest, with a staircase scheme available.

Shared Equity etc isn't Shared Ownership, but the two often get muddled up and Shared Ownership slammed for the pitfalls of Shared Equity. This article hasn't done that, but often threads do.

CLAPTON

Graham_Devon wrote: »

Say the house is valued at 130k by the housing associations valuers. There is no movement on that. The seller has to sell for 130k and the buyer has to buy for 130k. You can't offer 125k as a buyer.

I.e. it's fixed price.

This is, at least, how my scheme, and all schemes I have seen mentioned on the house buying board have worked. There may be other schemes that work differently, but have never heard of them.

On a secondary note, this almost always leads to shared ownership being overvalued.

clearly a disaster for the poor 'owner' as in a poor market they will be impossibhle to sell

and of course nothing to do with 'market' price which is of course a price freely negotiated between buyer and seller

as I say housing association desperately need some firm legally enforcable rules and regulation and independant oversight.

Graham_Devon

CLAPTON wrote: »

clearly a disaster for the poor 'owner' as in a poor market they will be impossibhle to sell

Harder to sell, certainly, not impossible by any stretch however.

There is a continual throughput where I live, recession has made no difference in terms of new owners here from my observations.

I've personally witnessed 3 new sets of neighbours in my little culdesac of 7 houses in the last 2 years. It's always a worry as to who will turn up! However, it appears to have been middle aged people, rather than younger people.

The last one was interesting, as the lady defaulted on everything and left the house, including some posessions. That one was empty for 5 months. New couple in there now though, I'd say in their 50's.