Unexpected issue with owning / selling my affordable home

RelievedSheff

I think you are over thinking this a little. Why not try to form a chain first? If it doesn't happen then use your plan as a back up plan.

Seems an expensive way round matters though with extra stamp duty and running two houses.

Also bear in mind, empty houses take longer to sell than furnished and lived in houses.

Snuggles

RelievedSheff said:

I think you are over thinking this a little. Why not try to form a chain first? If it doesn't happen then use your plan as a back up plan.

Seems an expensive way round matters though with extra stamp duty and running two houses.

Also bear in mind, empty houses take longer to sell than furnished and lived in houses.

Thank you. I don't think we're overthinking, we are just considering our options. I'm not saying this is absolutely the only possible way forward, but we know how long these houses, in this particular scheme, take to sell (I'm not making it up!). Not all such schemes are the same, they can have different restrictions and covenants, and the specific details will impact on how lenders view the risk, given any potential difficulties they see in selling the property on should they have to repossess.

We may well try to sell in the usual way first, but we wanted to be fully informed about what our other options are, which is why I made enquiries with the HA about leaving the property empty, only to be told I was not allowed to buy another property without selling this one, with no further explanation.

We know it's an expensive way to do things. Another alternative would be going in to rented for a while if we do secure a proceedable buyer but haven't found something ourselves (we have some specific requirements). But this is potentially tricky  as we have cats, and 99% of properties I see advertised for rental, they won't even consider pets. It is also costly.

Yes I had considered whether it might be even harder to sell empty. OH thinks it will look bigger empty, but I think a lot of people struggle to see how they could use space in an empty property, and of course it doesn't look "homely".

olgadapolga

Snuggles said:

Yes I had considered whether it might be even harder to sell empty. OH thinks it will look bigger empty, but I think a lot of people struggle to see how they could use space in an empty property, and of course it doesn't look "homely".

I think that "abandoned" and unloved homes take longer to sell, not necessarily empty homes.

I've viewed homes whereby the owner has died and even though some had furniture in, I was put off by the neglected atmosphere and appearance of the house.

Some lived-in homes also have a very neglected appearance, which would, and have, put me off.

I've also viewed empty houses (which I prefer to see) which I've then gone on to buy, as I could see the potential of the property more clearly. Empty houses also give you the opportunity to poke around and check things out thoroughly, which you can't do in a furnished property. But I think it's down to personal preferences.

With regards to the HA/whoever is telling you that you can't buy another property whilst owning your current home, did you not have some sort of paperwork from them when you purchased your home? Did your solicitor say anything about it? Might be worth digging out the paperwork from your purchase and reviewing it.

Snuggles

olgadapolga said:

Snuggles said:

Yes I had considered whether it might be even harder to sell empty. OH thinks it will look bigger empty, but I think a lot of people struggle to see how they could use space in an empty property, and of course it doesn't look "homely".

I think that "abandoned" and unloved homes take longer to sell, not necessarily empty homes.

I've viewed homes whereby the owner has died and even though some had furniture in, I was put off by the neglected atmosphere and appearance of the house.

Some lived-in homes also have a very neglected appearance, which would, and have, put me off.

I've also viewed empty houses (which I prefer to see) which I've then gone on to buy, as I could see the potential of the property more clearly. Empty houses also give you the opportunity to poke around and check things out thoroughly, which you can't do in a furnished property. But I think it's down to personal preferences.

With regards to the HA/whoever is telling you that you can't buy another property whilst owning your current home, did you not have some sort of paperwork from them when you purchased your home? Did your solicitor say anything about it? Might be worth digging out the paperwork from your purchase and reviewing it.

Thanks, that's a very good point about homes that look neglected, whether they are furnished or empty. We're intending to get this one looking as good as possible in terms of decor etc, given that it's likely to appeal mostly to an FTB. 

Yes I have all the relevant paperwork from when I purchased from both the solicitor and the HA, as well as the lease. The solicitor highlighted all the restrictions/covenants in the lease and other title documents. But there is nothing anywhere to say I can't purchase another property and continue to own this one.

silvercar

I don’t see how it could be legal to say you can’t buy another property while you own this own. I imagine it could be a condition that you can’t own another property when you are buying this one and that you can’t let it out, but I don’t see how a contract can have such a clause, if it does it would probably be ruled an unfair contract term.

I do wonder if these properties are talking longer to sell just because they can’t reach the open market until they have been for a sale for a period of time.

getmore4less

Get the ball rolling on the sale you can always slow that down a bit if it goes faster that you suspected.
Sooner you get through the HA controlled  period the better. 

Start looking so you have a really good idea what's out there  and if you have your ducks lined up can start that buying process if you find something.

depending how much you will release from your current place you may want to look at ERC free products

Once sold If a large overpayment would change LTV on the new one if it was enough something like a 2year track and fix could be a good option.

Snuggles

silvercar said:

I don’t see how it could be legal to say you can’t buy another property while you own this own. I imagine it could be a condition that you can’t own another property when you are buying this one and that you can’t let it out, but I don’t see how a contract can have such a clause, if it does it would probably be ruled an unfair contract term.

I do wonder if these properties are talking longer to sell just because they can’t reach the open market until they have been for a sale for a period of time.

Yes I can't see how it could be enforced, unless there is something I'm missing. I'll be interested to see what the HA eventually come back with in answer to my query. As you say, it was part of the HA's eligibility criteria to purchase in the first place (i.e. I couldn't own another property at that time), but I don't see how they can legally still dictate what I can and can't do with my own money 14 years later when there's nothing about it in the lease.

I don't think that's the reason in this case - the local area restriction only applies for a few months, but some have taken literally years to sell. I personally think it's a combination of the 106 restriction making getting a mortgage trickier, and spooking buyers, and also the fact that they are very small homes. I think that a lot of FTBs prefer to go down the help to buy equity loan route and buy a bigger new build (that scheme didn't exist when I bought this house). It's a two bed house, but in my view, really only comfortably big enough for a single person, so that also limits it's appeal. 

Snuggles

getmore4less said:

Get the ball rolling on the sale you can always slow that down a bit if it goes faster that you suspected.
Sooner you get through the HA controlled  period the better. 

Start looking so you have a really good idea what's out there  and if you have your ducks lined up can start that buying process if you find something.

depending how much you will release from your current place you may want to look at ERC free products

Once sold If a large overpayment would change LTV on the new one if it was enough something like a 2year track and fix could be a good option.

Thankyou, it's a four month period before it can be offered on the open market. 

We've been looking at houses for a while (online) and because we have some specific requirements there's not been a massive amount which would suit our needs (and given the current market that's just got worse). However a few weeks ago a house came up which looks just about exactly what we're after. We were going to arrange a viewing and we thought if it was just what we wanted, we might well take the plunge to buy before selling - that's when I contacted the HA to double check about leaving this house empty, and they put this potential spanner in the works. 

Yes, thank you, that is something we will need to consider carefully if we do buy before selling, as the equity from selling this one makes a significant difference to the LTV on a new property (assuming we don't have to discount it to bargain basement levels to shift it!).

getmore4less

You have said the current place is not suitable and the goal is to sell I would get on with that anyway.

You can still go with the buy if you find something

If you get a buyer first you can reassess options or delay the buyer.

Grumpy_chap

Snuggles said:

14 years ago when I was single I bought a leasehold house. The freeholder is a housing association. I paid 60% of the open market value at the time, and when I sell I can only sell for 60% of the open market value. The HA always describe this as a shared equity scheme - in reality I think it's actually a discounted/restricted sale under a Section 106 agreement. As well as the price restrictions, for the first few months of marketing, the property can only be sold to someone with a local connection. After that it can be offered on the open market. This is all set out in the lease. I am not permitted to buy the property outright, and I don't pay any rent to the HA, other than a nominal ground rent.

The fact you only pay a low ground rent makes this uncommon for shared ownership, so I suspect the "discounted/restricted" sale approach you mention is what it is - though I am entirely unfamiliar with such schemes.

It seems like a real shame that you cannot buy the remainder of the property as, if you could "staircase" to 100% you could then, presumably, do whatever you liked.