shared ownership trap.....

Harman83

Hi all,
just going to give a summary of our situation and hoping for some positive advice. In 2004 we purchased a house under the shared ownership scheme at the time it was right for us, we purchased 50% at 70k. In 2006 the hoise was re valued at 165k so our share worth 82500. Since then we have made a great of improvements not simply to add value but to have a nice home for us and the family. This includes new kitchen, gutted the lounge with new flooring plastering etc, new carpets and completely new boiler and heating system because the old system was deemed dangerous. Anyway we have spent thousands.

We were told when we bought the house that shared ownership properties are always slightly more than the market value as they are at a premium. In fact when we purchased the house we paid roughly 6k more than one two doors away and I feel ours was in worst condition.

We decided to look into selling as we are both earning more and have a bigger family. Prior to paying the 180 to the housing association for a chartered surveyor to valie the house we instructed a couple of estate agents to give thier opinion on value. Yes I know estate agents are different to surveyors but felt it would give us a rough idea. Anyway they both stated that the house wpuld easily fetch 175k but to advertise at nearer 180k.

I then made land registry checks which state the property should be worth 177k. Then conducted research into sold prices. In march this year a property exactly the same went for 170k with the exception that this one does not have a garage nor driveway. Early last year a property two doors down the road was advertised for 170k, they wanted a quick sale so sold up for 165k. Anuway from the research I conducted I was confident of it achieving over 170k having been told shared ownership is slightly more.

The surveyor came in for around five minutes wasnt particularly insterested, in andnout in five minutes. Came back with a valie of 165k. Our dreams of moving crushed in an instant.

I went back to the ha ans explained the research and situation. Spoke to theanager who has saod he will make contact with the surveyor and explain why I believe the valuation to be in correct. I should hear something monday but I wont hold my breath.

In nutshell the manager at the ha has said to me I am perfectly entitled to have the house re valued as long asbits from a rics. If it comes in higher then great they will sell it for higher etc. But obviously having jad it valued at 165k this surely will put a mark on future valuations.

Im on complete tender hooks waiting to see what happens monday. Bit just cant help but think ive fallen victim of a con. This is not a true market valuation and I have the evidence, my house is immaculate and would make a lovely home for anyone. I would be willing to pay for a re valuation bit this will not guarantee a higher prive. Also the surveyors were not locally based and I feel perhaps had no local knowledge and local prices.
If the valuer doesnt budge, is there anything I can do or am I stuck!!

jk0

Am I missing something here?

Surely a house is worth what someone will pay for it? You can tell estate agents to put it up for sale for a million pounds if you like, but no-one will offer you more than what it's worth.

As regards your question, yes it was a trap. Many others are now falling into the same one with the 'Help to buy' scheme.

kingstreet

Harman83 wrote: »

having jad it valued at 165k this surely will put a mark on future valuations

No. No future surveyor will know the valuation. They will use the recent sale of similar property in the area to compare with yours. They will not know of this valuation.

The HA does not benefit from the value of the property being lower. It sets the value of its share and the rent is receives at a lower amount, as a result.

The HA may have erred in not instructing a more local surveyor, but that may be more to do with the survey firm that they instructed not having someone more local to do it at the time.

Instruct a local RICS chartered surveyor to carry out a valuation on your behalf. EA valuations are pointless and if an EA is saying £175k, they would probably expect you to accept an offer of around £165k.

Excited13

You mention that others have sold but were they SO or regular ownership? Personally I would pay more for a non SO property as you need to pay for the mortgage plus rent and are still liable for repairs.

Good luck!

Fraise

Harman83 wrote: »

Hi all,
just going to give a summary of our situation and hoping for some positive advice. In 2004 we purchased a house under the shared ownership scheme at the time it was right for us, we purchased 50% at 70k. In 2006 the hoise was re valued at 165k so our share worth 82500. Since then we have made a great of improvements not simply to add value but to have a nice home for us and the family. This includes new kitchen, gutted the lounge with new flooring plastering etc, new carpets and completely new boiler and heating system because the old system was deemed dangerous. Anyway we have spent thousands.

We were told when we bought the house that shared ownership properties are always slightly more than the market value as they are at a premium. In fact when we purchased the house we paid roughly 6k more than one two doors away and I feel ours was in worst condition.

We decided to look into selling as we are both earning more and have a bigger family. Prior to paying the 180 to the housing association for a chartered surveyor to valie the house we instructed a couple of estate agents to give thier opinion on value. Yes I know estate agents are different to surveyors but felt it would give us a rough idea. Anyway they both stated that the house wpuld easily fetch 175k but to advertise at nearer 180k.

I then made land registry checks which state the property should be worth 177k. Then conducted research into sold prices. In march this year a property exactly the same went for 170k with the exception that this one does not have a garage nor driveway. Early last year a property two doors down the road was advertised for 170k, they wanted a quick sale so sold up for 165k. Anuway from the research I conducted I was confident of it achieving over 170k having been told shared ownership is slightly more.

The surveyor came in for around five minutes wasnt particularly insterested, in andnout in five minutes. Came back with a valie of 165k. Our dreams of moving crushed in an instant.

I went back to the ha ans explained the research and situation. Spoke to theanager who has saod he will make contact with the surveyor and explain why I believe the valuation to be in correct. I should hear something monday but I wont hold my breath.

In nutshell the manager at the ha has said to me I am perfectly entitled to have the house re valued as long asbits from a rics. If it comes in higher then great they will sell it for higher etc. But obviously having jad it valued at 165k this surely will put a mark on future valuations.

Im on complete tender hooks waiting to see what happens monday. Bit just cant help but think ive fallen victim of a con. This is not a true market valuation and I have the evidence, my house is immaculate and would make a lovely home for anyone. I would be willing to pay for a re valuation bit this will not guarantee a higher prive. Also the surveyors were not locally based and I feel perhaps had no local knowledge and local prices.
If the valuer doesnt budge, is there anything I can do or am I stuck!!

Yu can't always take what estate agents say as gospel, they only price according to similar sales close to you, so they are not always spot on. It's a bit of a guessing game sometimes, and the estate agent will suggest a figure and see what happens. If there's no takers then they will advise you to lower the price.

A surveyor doesn't have to be local to your area - even if he was it doesn't mean he would know the exact fetching price of your property. The surveyor's and estate agent's quotes are not far out, to be honest. So I'm not sure if it's worth paying another surveyor for a quote. You also need to remember that when you do eventally sell the new buyer will have their own surveyor inspect the house, and if he says it's lower than the price they've offered, then the bank can refuse to lend the buyer the full amount.

It's a shame you won't get muuch back for all the decorating/new kitchen etc, but it should make it more sellable. You never know, you may get over the asking price if lots of people want it!

I am very confused though about a shared ownersip property being more expensive than a normal one...that would actually put me off...but maybe I'm missing something?

gazzabboi

My advice would be to staircase to 100 while they are putting a low value on it, get a cheap 2 year fix mortgage, then sell it for a value nearer to what you want, then you won't need to worry about valuations.

I would of thought the valuation sounds about right though, you bought shared ownership (more than likely at full asking price), I can't imagine it has gone up more than 25k since 2006. Most areas in the UK still show prices being at 2006 levels now.

SailorSam

Excited13 wrote: »

Personally I would pay more for a non SO property as you need to pay for the mortgage plus rent and are still liable for repairs.

Good luck!

My house is much to big for me and i've thought of moving, i saw a couple of flats not far away that i thought would be perfect but as soon as i read 'shared ownership' i walked away.

Kynthia

If you're confident then find your own local RICS surveyor and hire them. Maybe even have your own evidence prepared for when they come round.

Do you have the option of going direct to the open market to sell? As then you can set your own selling price and usually the HA are happy with their percentage value according to the official valuation. If not, would that change if you staircased to 100%?

Harman83

I under what people are saying about ea values and as I said in my post I took them as a rough guide, but they were both consistent and in line with others sold and land registry figures. Also there is a differenve of nearly 15k between that and the surveyors etc.

I though about staircasing but now told that the ha has first refusal for 21 years even if I own 100%.......

andyuk01

Harman83 wrote: »

I under what people are saying about ea values and as I said in my post I took them as a rough guide, but they were both consistent and in line with others sold and land registry figures. Also there is a differenve of nearly 15k between that and the surveyors etc.

I though about staircasing but now told that the ha has first refusal for 21 years even if I own 100%.......

Which is surely a good thing?

You have the property valued and offer it to the HA - they either take for the price it was valued at with no hassle or decline and you sell on the open market

Win Win situation

leveller2911

Harman83 wrote: »

I though about staircasing but now told that the ha has first refusal for 21
years even if I own 100%.......[/QUOTE

]


Are you sure about this?.

The reason I ask is its common for HA to have 1st refusal if you want to sell but don't own 100% but AFAIK If you own 100% you are free to sell it to the highest bidder.

SO houses are valued less than if it were an open market prpoerty because of the stigma of SO and rental properties. Theres no premium charged on SO houses.

There is a premium when you buy any type of new build whether its open market or SO.