Unable to sell leasehold property

rosie222285

Hi All
Im really hoping someone out there can help me. I’ve been trying to sell my shared ownership property (50/50) that I have owned for the last 5 years and have now lost two buyers as both the mortgage companies have stated that the 68 years remaining on the lease is too short. My landlord which is a council housing association have refused to extend the lease. All the properties within our cul de sac are under the exact same lease terms and now all are unsellable. The properties are sold under the affordable housing umbrella and you need to meet the affordable housing criteria to be eligible to purchase. I am now in a position where I can afford to buy on the open market and can give someone else a chance of owning at least part of a home like I had but am am unable to sell with no options left. These were marketed as affordable housing but now are the very opposite. I have a house I no longer need but cannot sell and yet apparently low cost affordable housing is in great demand but the council are unwilling to move. I have been informed that the The Leasehold Reform Housing and Urban Development Act (1993) doesn’t apply to me as it’s shared ownership not a straight leasehold. I really don’t know where to go. I’m fortunate that I can now buy on the open market but am trapped in a home I don’t need that could give some else in greater need than me a home of their own. 

Please help. 

princeofpounds

They are correct that you cannot use the statutory process to extend your lease.

https://www.campionssolicitors.co.uk/news/shared-ownership-lease-extensions
https://www.lease-advice.org/advice-guide/shared-ownership-leases/#:~:text=A%20shared%20ownership%20leaseholder%20of,is%20less%20than%20100%25%20ownership.

A few thoughts:
- If you can buy on the open market, why not staircase to 100% ownership, and then you will have the right to extend the lease.
- Have your read your lease thoroughly to see if there are any clauses about extension?
- What exactly do the housing association say about refusing to extend the lease. 

To be honest I wasn't aware of this quirk with shared ownership. It seems odd, particularly from a housing association. But it just goes to show that anything with the word 'scheme' in it is usually something to be avoided. 

ETA: More questions

- Would you mind telling us which HA this is? It may help research policies
- The lease seems really short - how long have you been there? What was the lease term when you bought? 90 or 99 years is quite typical to start with but were they building SO so long ago?

Sorry missed that part, blue_max below asks the natural next question

blue_max_3

I'm amazed you managed to buy a 73 year leasehold property at all. Were you not advised against it?

rosie222285

No I was not advised against it. My mortgage provider was more than happy to lend against it. My solicitor did not warn or highlight this as a potential issue upon selling either. 

The housing association is homes in sedgmoor and there are a whole cul de sac of these properties that have the same same lease that are now stuck in this position. Their response was that they have plans to review all the leases but would not commit to a timeframe for when this would happen. 

I cannot staircase as per the lease only 50% ownership max which is what I have. 

Petriix

Most shared ownership properties allow for the option of buying or selling the freehold. I looked into a lease extension on a shared ownership property we were considering "buying" but the housing association had no process for working out the cost.

In theory they shouldn't charge at all for extending the lease because that's contrary to the whole idea of shared ownership in the first place. It seems like you were badly advised when you bought it and have a particularly restrictive lease. I would write to your MP and consider legal action against your original solicitor and the housing association.

Drawingaline

Wow! We bought a leasehold flat back in 2001 with an 80yr lease and were advised then we would need to extend it at some point. We got the mortgage, but had to pay to extend it before selling it in 2007. 

Sounds like a rubbish situation.

rosie222285

Ok thank you. 

I’m waiting for a property litigation expert to come back to me to see if I have any other options. I have lost two house sales because of this as I was aware it would be such an issue and the housing association have been completely unwilling to even try to resolve this. It goes completely against what the low cost affordable housing was meant to be set up for. I have complained to the housing ombudsman and the housing government body. I’m going to contact my MP as well. I feel completely trapped now due to poor advice and guidance from people who were meant to be the professionals as I was a first time buyer and that was all I could afford. 

jumperabv3

rosie222285 said:

I cannot staircase as per the lease only 50% ownership max which is what I have. 

What if both you and the other person owning 50% apply together to extend the lease - will that work?

rosie222285

The other 50% is owned by the housing association. I have a feeling from what I have heard so far that they have stitched us up royally. 

trex227

When I worked at a solicitors I took a call once from someone who had been told by the estate agents she needed to start the process of extending her lease before going on the market as she only had 59 years left. I think she thought it would be a £750 payment and it would get sorted. That was our legal fee at the time but I used the leasehold advisory calculator and had to break to her the estimated premium payable to the landlord was £23,000! 

When she’d bought her lender obviously had no issue with 60 something year leases and the solicitors firm that acted for her hadn’t specifically flagged it up her. I assume it was in their legal report though.

At this stage instead of incurring litigation costs I would contact the solicitors that acted for you in the purchase and ask for their complaints procedure. If I remember correctly solicitors only have to keep files for 6 years so you definitely want to start the process of a complaint before the file is potentially destroyed. 

rosie222285

Ok thank you.