Shared ownership - strange problem

jonas123

Hi all,

I have a strange problem which is worrying me a bit with my shared ownership property. I bought 50% of a property in (a nice part of) London and since purchase, the identical flat on my corridor sold for £630,000 :shocked:

My property was valued at £500,000 at the time (of which I bought half, making it just about affordable).

My worry, as you may guess, is that I'm afraid I won't be able to sell this on when the time comes (and I don't think I'll ever be able to buy the other half!)

I could just be getting a bit worried for nothing, it's a highly desirable area, but the housing association state that you must be a first time buyer in order to purchase this. Am I getting worried for nothing, or will I never be able to move out of this place?

Fire_Fox

Pardon? An identical flat sold for more than the value of yours what are you worried about? That there are one bedroom flats in desirable parts of London under £250K for full ownership?

jonas123

No - full ownership would be £500k (or £630k now with the value rise). I own half, of which I paid £250k for (and pay rent on the other half).

My issue being, the rise in value means that if I want to sell, it would be valued at say £630k, which is £315k for 50% ownership. As it is shared ownership, only first time buyers are allowed to buy, so the person that I sell to has to be approved by the housing association and not earn above a certain amount etc.

I'm worried that if the value keeps on going up, then there will be no first time buyers able to buy my flat (as it's too much), and hence I'm stuck!

phill99

I think you should only be worrying about it when you want to sell. Your panicking about nothing at the moment.

Fire_Fox

So the issues is the buyer's income? You didn't say that at all!! The value won't keep rising because, as you say, buyers won't be accepted by the HA so that will cap the value. Explain your concerns to the HA, state that you are concerned the value and income requirements are mismatched.

But overall the prices going up above what any sensible first time buyer would want to pay is always going to be an issue if you buy a ridiculously expensive shared ownership property, it's a niche market.

jonas123

unfortunately from what I can tell, the value isn't really linked to affordability. The flat is valued by a surveyor, and that is the price that goes on the market. You can't make offers, you have to pay that price...hence it being a slight issue. But as you say, probably not worth worrying about for the moment!

Fire_Fox

So the surveyor needs to be informed of all the Housing Association's criteria, that should affect his valuation because the true value is what a property will sell at and that, in turn, is directly dictated by the maximum income requirement.

thelem

The housing association are there to support people who need help finding suitable property. If they find that they are overpricing their properties for the first time buyer market, they will either:
* Reduce the price (the surveyor could be told to bear the restricted market in mind)
* Reduce the ownership share
* Sell to someone else and use the money to buy a different FTB property

It doesn't serve their aims to have a property hanging around on the market.