Shared Ownership Prison

AnotherJoe

Are you saying that HA will not let you sell, full stop, even if you fund the shortfall, unless its sold at a stipulated price?

Is that the root of the problem?

NOVAMET21

CookieM wrote: »

When was the valuation done?

Does the HA allow back-to-back staircasing, allowing you sell 100% of the property on instead?

I think staircasing to 100% for Scooby might be out of question at the moment. Not sure if Scooby paid the stamp duty when she originally bought the flat. If Scooby didn't then as soon as Scooby buys more than 80% of the flat then Scooby will have to pay stamp duty. Also Scooby needs a bigger mortgage to afford 100%.

CookieM

back-to-back allows the sale and staircasing to go through on the same day. So a buyer would pay the solicitor 100% value, and Scooby would receive 75% to repay the mortgage and the HA would get their 25% back. No additional borrowing needed.

NOVAMET21

AnotherJoe wrote: »

Are you saying that HA will not let you sell, full stop, even if you fund the shortfall, unless its sold at a stipulated price?

Is that the root of the problem?

Very weird situation. If Scooby sells her flat then the buyer has to either buy 75% or more. If the buyer buys 75% then they have to pay the same amount of rent as Scooby did. So not a problem here.


However, if the buyer wants to buy 100% and considering the house value has dropped since Scooby bought the flat, then HA might get less money. Why don't the HA just find a buyer who is willing to buy 75% (Scooby's share). Still very weird demand by HA.

NOVAMET21

CookieM wrote: »

back-to-back allows the sale and staircasing to go through on the same day. So a buyer would pay the solicitor 100% value, and Scooby would receive 75% to repay the mortgage and the HA would get their 25% back. No additional borrowing needed.

I think the problem here is that the HA doesn't want the 25% of the valuation at the moment as it would make them short.


Still weird

CookieM

I'm currently purchasing a shared ownership property and the way it's worked in my situation is that the current owner had to get a valuation done on the property. Whatever this value came in at, is the value that it MUST be sold for, no more, no less. My mortgages valuation had to be exactly the same as theirs and i had to borrow the exact amount for my share.

If the valuation has been done recently then it seems like it's just one of the shared ownership pitfalls - the share is quite high and there are no buyers who can afford it, or are deterred by this exact issue arising for themselves.

If it's the same in Scoobys case, then back-to-back could be a solution.

AnotherJoe

CookieM wrote: »

back-to-back allows the sale and staircasing to go through on the same day. So a buyer would pay the solicitor 100% value, and Scooby would receive 75% to repay the mortgage and the HA would get their 25% back. No additional borrowing needed.

I think OP is saying that HA has made a valuation and wont accept less than whatever they deem the 25% to be and that is more than the open market price. So for example, HA determines price is £100k and their share is £25k even if property will only sell for £80k and they would then get £20k not the £25k they want.

Pity the original post was all about subletting which is a red herring for this problem, if it is the problem.

If that is correct, then you would think there is a way in the contract to challenge the valuation, such as an independent survey, or simply the fact its been advertised at that price with no takers.

Is this correct OP and is there a way to challenge the valuation? Does the contract state that HA can decide their portion is whatever they want it to be? Or is it subject to an independent valuation? Any reason it cant be put up for sale for an extended period? If you have friends in it at a good rent surely they will be cooperative, or they aren't friends?

CookieM

I believe it's down to the seller to instruct the survey which is then passed on to the HA. They then market the property themselves at this value, and if unable to sell it's down to the seller to market themselves via EA. It seems that the only avenues the OP has gone down so far is selling their own share, so it doesn't seem like the HA would at any point have been concerned about the value of their 25%.

But yeah, OP needs to clarify the above points.