Shared Ownership Prison

Scooby2016_2

I have had this problem for some time now.

I bought a flat in 2007 post divorce. It was perfect at the time and shared ownership (75% owned by me). I took out an interest only mortgage.

Fast forward a few years and I had met the man I should have met years before, we have 2 children now and long outgrown the flat. He has a house in his name, which we moved into giving us the room we needed as a family. He now has 51% equity in this property.

Before we moved, I tried to sell the flat but couldn't achieve the amount owed on it. The flat has been sub-let to friends for years now, not even covering the mortgage. I asked the estate agent to keep on the books but didn't want to actively market as it wasn't fair on the friend renting at the time. In between friends renting, I have quickly got it back on the market without luck.

So my problem is that the housing association that owns 25% has a contract clause that states I am unable to sub-let. I wrote to them requesting this clause be lifted as I was unable to sell the flat was unsuitable for a family of 4. They declined this request. The mortgage is old and has long since shifted to the standard rate as I don't want them to investigate and ask questions with the housing association. On top of this, we need work done on my husbands house but without me on the mortgage he cannot get past the affordability check.

We want to do the following:

1. Change mortgage on the flat to repayment with better interest rate.
2. Get permission to sub-let from the housing association. In turn we should be able to get permission from the lender.
3. Put my name on the house mortgage and get extra money on the house to do the work we want.

Can anyone offer advice please?

MortgageMamma

You don't say how much negative equity you have in the property? It would be helpful fi you could as dependent upon the amount there could be different solutions.

Scooby2016_2

I reckon it is worth what I bought it for now, with a little lift in the market so 5% equity at most.

obi1974

I would like some advice about shared ownership as my OH and myself is considering one. Does the rent we pay on the HA share increase whenever the value of the house goes up?and will the HA continue to undertake valuation every year as this could mean that the rent goes up if the value goes up. Is this the norm?
I am asking because the value of the house is likely to increase as it's in Bucks. It's a new build townhouse. We are going into SO with mixed feelings as it's the only feasible option we have as we only have little savings of 10k, joint income of 51,500 with good credit score. Kindly advice. Thanks

ViolaLass

Scooby2016 wrote: »

I reckon it is worth what I bought it for now, with a little lift in the market so 5% equity at most.

So why hasn't it sold?

If you don't have a reason, price is likely to be the issue.

Scooby2016_2

We have marketed it between tenants. We don't have the means to market the flat for a few months. Unfortunately shared ownership has had some bad press in recent years and not all mortgage companies were offering part ownership mortgages.
You are only allowed to market at a pre-valued amount due to the housing association owning part.

What I really want is advice, legal or financial as to whether the housing association is acting lawfully by not allowing us to sub-let without profit or how I can change the mortgage.

csgohan4

obi1974 wrote: »

I would like some advice about shared ownership as my OH and myself is considering one. Does the rent we pay on the HA share increase whenever the value of the house goes up?and will the HA continue to undertake valuation every year as this could mean that the rent goes up if the value goes up. Is this the norm?
I am asking because the value of the house is likely to increase as it's in Bucks. It's a new build townhouse. We are going into SO with mixed feelings as it's the only feasible option we have as we only have little savings of 10k, joint income of 51,500 with good credit score. Kindly advice. Thanks

Please create your own thread, do not hijack someone elses

csgohan4

Scooby2016 wrote: »

We have marketed it between tenants. We don't have the means to market the flat for a few months. Unfortunately shared ownership has had some bad press in recent years and not all mortgage companies were offering part ownership mortgages.
You are only allowed to market at a pre-valued amount due to the housing association owning part.

What I really want is advice, legal or financial as to whether the housing association is acting lawfully by not allowing us to sub-let without profit or how I can change the mortgage.

The key thing, you signed the contract stipulating no sublet before you bought the flat and you asked if they would re consider, they declined. They are the free holder and hold all the cards.


The best way forward if you need the money is to sell and cut your losses.


You can try and remortgage if you pass affordability rules.

AnotherJoe

Scooby2016 wrote: »

We have marketed it between tenants. We don't have the means to market the flat for a few months. Unfortunately shared ownership has had some bad press in recent years and not all mortgage companies were offering part ownership mortgages.
You are only allowed to market at a pre-valued amount due to the housing association owning part.

What I really want is advice, legal or financial as to whether the housing association is acting lawfully by not allowing us to sub-let without profit or how I can change the mortgage.

That's the deal you agreed to when you bought into this contract, why do so many people here think they can just unilaterally break contracts because their personal circumstances don't suit? Would you fancy it if the HA said "we're a bit short of money so we are going to lower the amount your 75% is worth so we can make more money when we sell it again"? "We understand that's not in the contract but we are in tough financial position so that overrides the contract"

HAs are there to provide more affordable housing, not to subsidise wannabe landlords and the extensions on their other houses . Sorry if that's harsh but that's exactly what you are asking for.

You have your estimate what it's worth but obviously that disagrees with reality, selling it at a loss for a quick sale is probably your best bet to just make a clean break, you can't indefinitely let to friends at a loss, and even if you can you are making a loss anyway, not to mention the HA may force the issue at a time not of your choosing.

Get rid of it.

Scooby2016_2

AnotherJoe wrote: »

That's the deal you agreed to when you bought into this contract, why do so many people here think they can just unilaterally break contracts because their personal circumstances don't suit? Would you fancy it if the HA said "we're a bit short of money so we are going to lower the amount your 75% is worth so we can make more money when we sell it again"? "We understand that's not in the contract but we are in tough financial position so that overrides the contract"

HAs are there to provide more affordable housing, not to subsidise wannabe landlords and the extensions on their other houses . Sorry if that's harsh but that's exactly what you are asking for.

You have your estimate what it's worth but obviously that disagrees with reality, selling it at a loss for a quick sale is probably your best bet to just make a clean break, you can't indefinitely let to friends at a loss, and even if you can you are making a loss anyway, not to mention the HA may force the issue at a time not of your choosing.

Get rid of it.

Thanks for taking time to reply.

The flat can only be sold for the pre-valued amount so I really am stuck.

The comparison to the HA asking for more shares to my problem is not correct. I am looking to seek permission to sub-let not to gain financially nor to take any income from them.

Looks as though I am as locked in as I thought. I signed the contract and must abide by it, life doesn't always follow the plans though.

This post really was a plea to see if anyone knew more than us about it, loopholes etc.
Doesn't look hopeful.

NOVAMET21

"I would like some advice about shared ownership as my OH and myself is considering one. Does the rent we pay on the HA share increase whenever the value of the house goes up?and will the HA continue to undertake valuation every year as this could mean that the rent goes up if the value goes up. Is this the norm?
I am asking because the value of the house is likely to increase as it's in Bucks. It's a new build townhouse. We are going into SO with mixed feelings as it's the only feasible option we have as we only have little savings of 10k, joint income of 51,500 with good credit score. Kindly advice. Thanks "






No, the rent you pay has nothing to do with the increase of the property's value. The rent increases depending on the inflation. If you buy further more shares then your rent will reduce accordingly.


Hope this helps.