Low Cost Housing - NOT Shared Ownership!

TheWoot

Can anyone help me?

I bought a house under a 'Low cost housing' scheme. To qualify i needed to be from the local area and have never had a mortgage before. I could then buy my brand new property for almost 40% less than market value. I was led to believe that all new developments had to provide a percentage of low cost housing for people such as me. I only pay a mortgage, no rent and there is only me on the mortgage.

I have owned it now for approximately 5 years and am thinking of selling it. No one i have spoken to has any idea what i am talking about. I was originally told that when i sell it i will only get the percentage increase in house prices not the full market value (plus what i paid) But as no one else knows about this scheme can i sell it for full market value?

Any help appreciated!
TheWoot

dmg24

You have described two different schemes there.

Firstly, with straightforward low cost housing, you get to sell it for full market value and keep any of the profit. The only caveat with this is that there may be a liability to pay back a proportion of the discount depending on how long you have lived there.

The second scenario you have described is shared equity (not shared ownership!), which can be with the builder or a local housing authority.

You need to check your paperwork to find out under which scheme you bought your property.

Also, not all new developments have to have low cost housing. This was the intention, but developers do tend to be able to give the local authority a 'donation' rather than offering low cost housing.

Richard_Webster

Can't really tell for sure but it looks as if there are covenants preventing the property being occupied by someone from outside your area.

That would mean that the number of potential buyers would be reduced and make the house worth less than other similar houses without that restriction.

Your solicitors should have explained the implications to you when you bought the house. If he didn't then you will need to get a solciitor to look at it now to explain what you can and can't do. I am only guessing here and there may be some other explanation for the position.

It will depend upon your location whether there is an established market for similar houses. I once acted for a client buying a similar kind of property in South Devon and the local estate agents seemed to have a kind of informal discount that they applied to values because of that kind of restriction. Halifax accepted that the property was simply worth less and would lend, but at that time Chelsea Building Society wouldn't becaus ethey didn't like the restriction. So you might find a problem with your buyer getting a mortgage.

As a conveyancing solicitor I believe the information given in the post to be useful but I accept no liability except to fee-paying clients.

TheWoot

Thank you for your replies.

I have a feeling that the Builders..Persimmon...had no idea what they were selling or how it worked and as far as i know there is absolutely nothing giving me information on what to do in the future! I have no paperwork to refer to, suppose i will have to contact my Solicitor and look through the deeds (if that is possible)

I have actually remortgaged this property and nothing showed up then. I have a normal mortgage with no mention of clauses. I am stumped but will follow the getting advice from a solicitor.

Many thanks