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Buying 2nd Hand Shared Ownership
izsushant
Posts: 51 Forumite
Hey Everyone,
I am thinking of buying a shared ownership property and had a few questions which people might be able to guide me on through their experience.
I have seen a property which I like. It's been on the market for over a year, for the full share at £230k (which I presume was the valuation by the housing agency) but hasn't sold. I think the property is priced too high. The current owner owns 50% of the property.
Am I allowed to make a lower offer?
Also I was thinking of taking out a mortgage rather than having the amount borrowed from a housing agency. I have been approved for a mortgage for the full 100% value less my deposit. When I spoke to the owner and estate agents, they said the property would could be purchased 100% if I wanted. Any thoughts?
Thanks for the help in advance!
I am thinking of buying a shared ownership property and had a few questions which people might be able to guide me on through their experience.
I have seen a property which I like. It's been on the market for over a year, for the full share at £230k (which I presume was the valuation by the housing agency) but hasn't sold. I think the property is priced too high. The current owner owns 50% of the property.
Am I allowed to make a lower offer?
Also I was thinking of taking out a mortgage rather than having the amount borrowed from a housing agency. I have been approved for a mortgage for the full 100% value less my deposit. When I spoke to the owner and estate agents, they said the property would could be purchased 100% if I wanted. Any thoughts?
Thanks for the help in advance!
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Comments
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If it is being advertised on the open market, presumably it has already been advertised internally for a few months to those that are registered or looking for SO properties so you can offer what you want. It is up to them if they accept or not.
If you buy 100% you would just be buying it like any other leasehold or freehold property (albeit with the HA as freeholder in the case of a leasehold), e.g. it will no longer be a SO property.0 -
If it is being advertised on the open market, presumably it has already been advertised internally for a few months to those that are registered or looking for SO properties so you can offer what you want. It is up to them if they accept or not.
If you buy 100% you would just be buying it like any other leasehold or freehold property (albeit with the HA as freeholder in the case of a leasehold), e.g. it will no longer be a SO property.
So could the HA object to the offer (even if the seller is happy with it!)?
Also would it be cheaper to buy 50% now which is under the stamp duty threshold and the other half later. Would it save on stamp duty? Thanks for the help0 -
The HA has to accept any offer, just as does the current part-owner. HAs get the property valued by a surveyor before selling, so they will have a much better idea of the true value than a simple EA marketing figure.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0
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SO properties tend to be priced higher than ordinary houses - which some people will accept because they can only afford to buy half the house, so they don't have many options. But if you can afford to buy the whole house you will probably get a better deal on the open market.I'm a retired employment solicitor. Hopefully some of my comments might be useful, but they are only my opinion and not intended as legal advice.0
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Also would it be cheaper to buy 50% now which is under the stamp duty threshold and the other half later. Would it save on stamp duty? Thanks for the help
It should be possible to pay an overall smaller stamp duty bill through staircasing (if allowed on 2nd hand SO properties?), you can read the details on HMRC website and make a calculation in your case.
http://www.hmrc.gov.uk/sdlt/calculate/shared-ownership.htm
However there are costs (like legal, re-mortgaging etc) involved with the staircasing process which would most likely negate any money that could be saved.0 -
kingstreet wrote: »The HA has to accept any offer, just as does the current part-owner. HAs get the property valued by a surveyor before selling, so they will have a much better idea of the true value than a simple EA marketing figure.
Hrm, I'm not entirely sure given the property has been on the marker for over a year and not been sold.0 -
Hrm, I'm not entirely sure given the property has been on the marker for over a year and not been sold.
Maybe not, but your problem is that the current owner cannot sell without the HA's agreement.
Also it is worth checking whether the HA is imposing their normal eligibility criteria on the sale, as this could also be a factor in it being on the market for such a long time.I'm a retired employment solicitor. Hopefully some of my comments might be useful, but they are only my opinion and not intended as legal advice.0 -
Many SO leases contain clauses that effectively prevent the present lessee with a part share from staircasing to 100% and selling on within 3 months - so you could get caught by that.RICHARD WEBSTER
As a retired conveyancing solicitor I believe the information given in the post to be useful assuming any properties concerned are in England/Wales but I accept no liability for it.0 -
Richard_Webster wrote: »Many SO leases contain clauses that effectively prevent the present lessee with a part share from staircasing to 100% and selling on within 3 months - so you could get caught by that.
That's a fair point. Thanks!0 -
From current experience of selling a shared ownership flat, the HA dicate the price through a valuation and then have final say on whether to accept an offer.
The part owner is not able to accept an offer for their share alone; even if you were prepared to accept £10 for your 50% the HA would veto it.0
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