What would you do?

johnsof75

Foolishly I 'bought' 50% of a one bed room shared ownership flat in London 12 years ago. The service charge and rent have increased so much it is no longer affordable. I am paying over £2,000 a month (over  2/3 of my salary) just for mortgage/ rent and service charge. Ideally I would sell it but it seems impossible - two other flats in my building have been on the market for over two years - it doesn't look like anyone has ever successfully sold up. I am not sure what the options are and what to do. Each month I am here things seem to get worse financially. What would. you do? 

Mineral1

Have you approached the owner of the other 50% to see if they are interested in buying you out? I presume so but you haven't mentioned

johnsof75

Thank you for your response. Yes its a Housing Association - they aren't interested. 

tinytiddles

If the HA will agree to it, you can put the flat up for sale at 100% and split the proceeds on what’s known as a back to back sale. The shared ownership market in London especially has taken a dive so you might find that they bite your hand off at the suggestion because they will have shot of it as well. 

theartfullodger

Go bankrupt. 

johnsof75

Thanks. Some of my neighbours have reached an agreement with the HA and advertised their flats on RightMove but they are not selling (have been reduced several times over the past couple of years). 
I would rather not go bankrupt as it may impact upon my job - I always pay my bills on time and had low debt but its increasing...

numbercruncher8

You could simply undercut the neighbours - if the flats are not selling I'm pretty sure its the price. After 12 years you must have a significant amount of equity in the property.

johnsof75

Thanks. I think the equity would depend on what we sold it for ? - we bought at  340k (50%) - cheapest similar one I have seen is for 430 but some are asking  as much as 490. I assume, if the HA allowed us to sell on the open market , we could try to sell for 430 or a bit less? Sorry if that is a stupid question but I've never solid a property before. 

As it is a shared ownership I understand we might have to go with whatever price their surveyor values it at? On the Shared Ownership site they are down at the higher end but on Rightmove between 430-450. 

I have noticed that all the flats for sale have new kitchens - it also needs painting. Would you do that before trying to sell or is it just wasted money? Thank you 

Martinaboven

430k 4 1 bedroom 😱

johnsof75

yes its crazy! Imagine that's why they aren't selling!

Grumpy_chap

Is that £400k for the 50% share, or £400k of which you own half?