Shared Ownership Negative Equity

LockettKTJ

I'm hoping someone can help.... I own 50% of a flat with the other half being owned by a Housing Association. I currently rent this out (with permission) and the tenants are moving out at the end of December. If I put it on the open market, I know it won't sell for £50000, which is what I initially paid for it. The flats in the building are currently selling for around £10000 less than people paid for them. So, it's likely I will get around £40000 for my share. I have approximately £30000 left on the mortgage. What happens if I sell it for £10000 less than I bought it for? How do I pay that £10k back? Thanks in advance

RelievedSheff

If you owe £30k and could sell for £40k then you are not in negative equity!!

GixerKate

I'm no expert but my understanding is that negative equity is where the value of the property is greater than the mortgage total so if you have 30k mortgage and the property is valued at 40k then you aren't in negative equity, in fact you have 10k equity in the property.

If you sold this property at 40k, 30k of it will go straight to the bank and you will pocket the 10k minus the costs of selling the property such as legal fees etc.