Shared ownership schemes

MSE_Helen_S

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Shared Ownership Schemes.

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Thanks folks,

K1RST1E_2

My husband and I bought a house through the shared ownership scheme in 2007. It's a four-bedroomed town house and our 50% share cost us £81,500. We have now inherited a 50% share in the family home which we want to move in to so are trying to sell our current house.

The Housing Association has informed me that we can sell the house at 100% despite only owning 50%. This isn't in the lease we received and I've not heard of this being done elsewhere. However, we have had our 50% share on the market for £77,500 (which is less than we paid) for 4 weeks now and not had any viewings. Therefore, we are going to open it up to full ownership at £155,000.

The downside is once we have a buyer, we then have to have an independent valuation done of the property and whatever this figure is, the Housing Association want 50% of that, not the price we are selling at. For example, if the buyer offers us £145,000 and the independent valuation comes in at £155,000, the Housing Association get £77,500 and we get £67,500 so they are £10,000 better out of this than we are.

andrea4s

My husband and I were kind of forced into shared ownership after spending a year living in one room with 3 children waiting for a council property. We bought a 50% share of a property for £75500k in 2006.

We had to take an interest only mortgage and pay rent for the other half. We did run an ISA for a while to repay the capital but struggled to keep up the payments on it.
Our mortgage company refused to refix our rate after 5 years and would only take us paying capital & interest at 6.08%. This took our repayments from £330 a month to £530. Unaffordable to us with the rent on top. Our boiler broke down last year and we had to use the whole of our ISA and borrow more to replace it. The housing association refused to contribute or help in anyway with this.
We have now begun the process of selling half of our share back to the HA. This has been so drawn out. Having to fight all the way, take legal help and explain our every expenditure to them just to get them to agree to it. We were forced to pay them £150 for the valuation and face £400 in legal fees to complete the transaction. The house has only gained £4k in value so it will not make a huge difference but hopefully put us under 90% LTV so we can change lenders.
The HA are on a win win with SO, they get all the equity without spending a penny on maintenance, repairs or renovations. We will never own the house outright and it will be almost impossible for us to move.
Wish we just waited a little longer on the council list.

kingstreet

This would have been better in HBR&S.

I suspect very little of the discussion will be about mortgages.

JaneandThomas52

Easy to buy shared housing, but not so easy to sell. Wish we had read Kirstie blog in advance. Our parent (in her 90's) was also sucked in, as she was in a re-generation area and used her sale money to buy 50% share £60,000 as she wanted to remain near familiar territory, under impression whole unit was £120,000. Now unable to live at home, it has been on the market for 6 years. Housing Scheme not interested to buy share, and permission to sell the whole unit, but now been offered £68,000 for WHOLE house, whereas the independant valuation by Housing Scheme we had to pay £185, and Surveyor has come back with a valuation of £75,000, so as previous blogger states you have to pay half of what is their value, not what buyer offers. In our case she is losing £26,000 anyway if it was half of 68, plus the extra to pay the difference in value. That means the house has devalued from £120,000 to £75,000. Whether it was ever that price in the FIRST place. we remain with an empty house, can sell at a huge loss or stay as we are and continue to pay Rent to Your Housing for their half for ever. We have the option to sub-let but that's a worry to take on. We are stumped. So Shared Housing we do not recommend. :mad:

Loopy28

I had a positive experience with shared ownership. My first property was through this scheme, it allowed me to get on the housing ladder, I made enough profit living there for 5 years from raised property prices and my repayments and was able to move to a non shared ownership property. I never would've got on the ladder otherwise and my house sold in 3 weeks with lots of people wanting it.

Maybe I was lucky but I have no regrets.

donfanatico

Can someone advise on something?

Once accepted and been offered a new build property on shared ownership where the property bought is not completed yet and a new valuation will take place between offer and completion, in case the new valuation is higher, which price will the property be sold for ? the original agreed price at the time of the offer acceptance or the new price (possibly higher) after the new valuation?

mashmash90

We've just accepted an offer on new build through shared ownership. At the time we viewed the full price of property was estimated at 445K and we were allocated 2 weeks later. We then waited a week for our purchasing interview at which point they told us it will be 457,500. Luckily this didn't affect us as we had enough to cover the shortfall with the share we were buying but they told us that it won't go up as soon as we pay the reservation fee. So once you've paid your reservation fee you lock in the price but before then, it can change. Apparently they value it every 3 months so we were unlucky to have had to wait 3 weeks between viewing and the interview but I guess that's why they timed it like that. Valuations are usually done by RICS surveyors so are fair for the market.

donfanatico

cheers, the next valuation is in December (with completion in Spring) so hopefully we will have gone through all of it by then.