In process of buying a Shared ownership flat - any scope to negotiating price?

Home2011

Hi all,
we're in a process of buying a shared ownership flat, which was delayed by the lockdown so everything was put on hold. Reopening the process now but the online valuations are showing this property is down in price by ever 5% already.
Do we have any room for negotiating the price down with the housing association, seeing they are supposed to be pricing the properties on market value? Property is a resale, there is a chain and we have a mortgage arranged and are in a good position with a large deposit. Buying it would leave us without any savings, which is making us very nervous in this current climate when the property, especially when it is already worth less than what we would be paying for it.
Any advice? How do we go about asking for reduction? We're assuming seller and the housing association would need to agree the reduction - is that correct?
Thanks 

Home2011

Anyone has a view on this? Or personal experience to share? Any feedback would be welcome. 
Thanks

Intenso

It is very unlikely I'm afraid.  Housing associations place strict limits on sellers when it comes to selling their part of the home and control the whole sales process.  I guess it wouldn't hurt to ask....

Home2011

Intenso said:

It is very unlikely I'm afraid.  Housing associations place strict limits on sellers when it comes to selling their part of the home and control the whole sales process.  I guess it wouldn't hurt to ask....

Thanks for your reply. Yes we thought that would be the case and that housing association would have a final say. But if the market price, which the advertised price was based on, has now dropped doesn't housing association have a sort of obligation to bring it in line with the current economic climate? After all they praise themselves as non profit making, so even if that is doubtfully true, shouldn't they need to adjust the price accordingly, especially if the seller agrees? If we were to have property valued ourselves and provide that as a proof, would that make a difference? 
Sorry to come back with more questions, but when you say it wouldn't hurt to ask are you talking about asking housing association, the seller or both?

Clare1384

I'm in the same situation and there is another property in the same block, which the property's value dropped by 10%. Housing Association said would only revisit if the lender comes back with a lower valuation, which let's be honest, most places have... So I guess you will have to try your luck or maybe speak with your lender! Any advice would be much appreciated!

Home2011

Clare1384 said:

I'm in the same situation and there is another property in the same block, which the property's value dropped by 10%. Housing Association said would only revisit if the lender comes back with a lower valuation, which let's be honest, most places have... So I guess you will have to try your luck or maybe speak with your lender! Any advice would be much appreciated!

Thanks for your reply. Sorry to hear you are in the same predicament, although it is kind of reassuring to know we're not alone. We haven't had any reply from housing association and it's impossible to get anyone on the phone, but I wouldn't be surprised they come up with the similar answer and pass the buck to the lender, who of course would only care if they couldn't get their money back, which they would in our case because we are putting down 25% deposit. This is why we're wondering if it would be worth instructing another valuation of our own? What do you intend to do?

Home2011

p123321 said:

Be wary, I have not been in mine 2 years yet and am so depressed about it. Right now I have someone blaring ed Sheeran from somewhere, and my nightmare upstairs neighbour banging and tapping on his !!!!!! laminate floor every 45 seconds constantly day in day out. 
They say ideal for young professionals but shove a load of social housing all around you. 
Obviously fruit loop upstairs doesnt work or go out EVER either to just ad to my hell. 
The best bit is theres nothing you can do about it as normal living noise !!! 
My advise stay well away from flats and well away from shared ownership. Costly mistake on my part. 
And no you wont be able to haggle and will pay far too much to live in a shithole. 

Thanks for sharing your views. I am sorry you have such a bad experience of SO, but it seemst for every bad one there is a good one as well, so like most things it seems to be a thing of luck.  
Saying that, we've been renting for a long time and have had our share of bad neighbours (as well as some great ones) so that's not much of an alternative either. So I am afraid it is either shared ownership or renting forever for us, therefore you know... a lesser evil if you like. 
I know there are many haters of SO and I appreciate everyone's opinion but there simply isn’t another way for us.
Hope you resolve your differences with your neighbours and start enjoying your place more.

chalky_white_2

The Housing Association has no input as to the 'market value'.   This is determined by an independent surveyor paid for by the Seller.   The Valuation will only last for 3 months, though it can be extended for an additional 3 months, after which a new valuation will need to be obtained.   Only if a new valuation is prepared would the price change accordingly.
Do bear in mind that you will need to have a new mortgage offer issued for the new purchase price (and borrowing, as necessary).   This may also impact the Seller's onward purchase, if the value is lower and they have insufficient equity to purchase.
SO is a fantastic scheme.   As with any property, rented, privately owned or otherwise, there can be issues.   But these issues are not solely because of it being SO.

Home2011

chalky_white_2 said:

The Housing Association has no input as to the 'market value'.   This is determined by an independent surveyor paid for by the Seller.   The Valuation will only last for 3 months, though it can be extended for an additional 3 months, after which a new valuation will need to be obtained.   Only if a new valuation is prepared would the price change accordingly.
Do bear in mind that you will need to have a new mortgage offer issued for the new purchase price (and borrowing, as necessary).   This may also impact the Seller's onward purchase, if the value is lower and they have insufficient equity to purchase.
SO is a fantastic scheme.   As with any property, rented, privately owned or otherwise, there can be issues.   But these issues are not solely because of it being SO.

Thank you for clarification. Our understanding is that the seller’s valuation extension already expired last week and they said they extended it again so the price is the same? Can this indeed be the case? Or would they in all cases need another valuation? 
Our mortgage broker says that if the purchase price was lowered the mortgage could simply be adjusted as we wouldn't be changing the amount of deposit, just borrowing less so their loan would be even more secure. 
Would the lender ask for their own valuation in this case?

chalky_white_2

Home2011 said:

Thank you for clarification. Our understanding is that the seller’s valuation extension already expired last week and they said they extended it again so the price is the same? Can this indeed be the case? Or would they in all cases need another valuation? 
Our mortgage broker says that if the purchase price was lowered the mortgage could simply be adjusted as we wouldn't be changing the amount of deposit, just borrowing less so their loan would be even more secure. 
Would the lender ask for their own valuation in this case?

1. Housing Associations, usually being charities, will require a reliable valuation.   But the value given is for the Surveyor to provide. It is possible that a new valuation has been issued with the same value by the surveyor. Unfortunately, you do not have a right to the valuation. That being said, you can ask your conveyancer to confirm that there is a valid valuation in place, in compliance with the lease terms.
2. While the lender will likely agree, per your broker's advice, they will still need to instruct the solicitor that they are happy to proceed. This is usually done by providing an amended mortgage offer to replace the old, though could simply be a letter. Either way, you would not be advised to proceed until written confirmation was recieved by your conveyancer from the lender, which would can take anywhere from 1-2 weeks. They would still rely on their own valuation, but this has already been provided (albeit they may refer back to their valuer to confirm).

Clare1384

What I am unsure is if we decide not to proceed, are they legally allowed to put the property back on the market with an expired valuation? I considered instructing another valuation but depends on how that's done, if they look at sold properties record, it might not change the value much since the market didn't move for the last 2 months. It depends on how much you want the property, I'm on the fence because 10% drop before I even move in is quite steep...