shared ownership rent increase!!! help

babybrain987

so,
have decided to buy a shared ownership property. Done all my sums and figures and took the plunge and paid my £500 deposit yesterday at 2pm. The rental was advertised at 2.9%. Whilst looking around the property the lady informed us they were applying to get it reduced to 2% in line with with their other properties.

however less then 24 hours after giving them my nonrefundable deposit they sent me an email stating there is a rent increase of 1.1% !!! that's £90 extra a month.

Surely its too convenient. There were 4 other properties that were reserved that have fallen through but got told it was down to their sales falling through. thinking differently now.

ive not even seen a lease let alone sign one.

can somebody please help. absolutely devastated.

G_M

What is the legal standing of the deposit?

* refundable?
* in what circumstances?
* based on what documentation?
* was the rent specified as part of the terms of whatever contract/agreement the deposit relates to?

I suspect you could withdraw and demand your deposit back as the deal has been changed, but I can't read the documentation from here.

babybrain987

i havent even been sent any documents yet. They said they do not release rental agreements until deposit is paid. thought this was odd at the time but never done this before so tried to look passed it.
i was told verbally it was non refundable and if we cancel within certain amount of days we may be able to get bits back.
the rental price is still being advertised as the same on rightmove. they have 7 more properties to sell.

PasturesNew

Is your maths straight?
If 1.1% is an extra £90/month, then the rent is about £8150/month.

That kind of .... doesn't sound right

G_M

You mut have some paperwork.

Surely no one hands over £500 without knowing what it is for......!

Write (yes, a letter) to them asking for your money back immediately due to the changed terms of the rental.

marliepanda

PasturesNew wrote: »

Is your maths straight?
If 1.1% is an extra £90/month, then the rent is about £8150/month.

That kind of .... doesn't sound right

Well the rent was originally 2.9%. I'm assuming that's 2.9% of the value of the amount they don't own or something like that. Now it's actually 4% of the value they don't own.

Your interpretation makes no sense, given we were told the rent amount in % terms.

babybrain987

their share is 97500. divide by 100 and x 2.9 then divide by 12 months = 235 a month rent.
they have up'd it by 1.1% making it 4%
so 97500 / 100 = 9750, x 4=3900 / 12 = £325 a month.

not sure where you £8150 came from!!!!

babybrain987

the £500 was to secure the property as ours, and is only refundable upon completion of the sale. so yes, i do know what it was for.

i just wasnt expecting them to up the rent less than 24 hours after taking the deposit.

eddddy

You paid the £500 based on the information you were given before you paid it.

Since some information (the rent) was misrepresented, you have very strong grounds for getting the £500 back.

However, you probably don't have grounds to make them reduce the rent to 2.9% - because the deposit was probably paid 'subject to contract'.

But it's probably worth writing to them explaining what you were told before you paid the deposit, and what it says on Rightmove, asking why there is a discrepancy. Who knows, they might reconsider.

getmore4less

4% is mortgage type rates, without the benefit of equity increase.

better off borrowing the money.
Do rental fees change affordability?

babybrain987

its a shared home ownership scheme . the full property value is £195000, i could not get this kind of mortgage or deposit, as much as id love to. there is nothing else in my area for what i could afford, this is really an only option for me. i have to be out of my current property soon. and yes, rental fees do affect the amount they will lend as they look at your affordability to pay the mortgage back.

i hate the idea of paying them the money but without being able to get a higher mortgage (in on £20500 p.a) i could not afford the property.