Shared Ownership Selling

Sophie94x

Hi all, I bought a shared ownership property and was wondering how selling would work....

I understand I have about £13,000 profit (my share) however, if I were to sell and buy another property can I use this money towards my deposit or does it not work like that?

Thanks! Will be my first time selling!

Elfbert

Usually you get a RICS surveyor to come around and give you and the HA a valuation.

From that you figure out how much equity you have, vs. how much you need to settle up on the mortgage.

The equity you can use for whatever you want - but remember you won't get the money until completion! You may get 10% of the value of your share upon exchange, which you can add to and pass on up the chain to the person you're buying from. But check - it could be that your HA only ask for 5%! A good guide is what you had to pay to get it when you bought.

So, for example:

Property is valued £400,000.
You own 50% of it.
Your 'share' is worth £200,000.
You have a remaining mortgage of £100,000.
So when your buyer buys it, they will give you £200,000, of which £100,000 is yours, and £100,000 goes to the bank to settle the mortgage.
Your buyer has to give 10% of the value of the share they're buying on exchange, so that's £20,000

If you need less than £20,000 for the deposit on your next purchase, happy days! If you need £25,000 then you need to find the extra £5,000 before exchange. (That's assuming you're in a chain.)

Plus you obviously need to cover all the costs - SDLT, conveyancing, whatever your HA want, the surveyor's fee...check your lease! (Usually HAs can also provide a pack as a guide to selling your bit, too.)