Shared ownership - valuation change at last minute .

Robbym50

Hi , 
im in the process of staircasing to 100% on my house , so I had a valuation done , sent to HA, housing association sent me the letter with price to buy other 50% , I had 4 weeks to accept , which I did . We are 80-90% of the way through conveyance, I have signed draft contract , memorandum of staircasing and mortgage deed and they have been returned to solicitor .
At this point , HA wants to up the price by £20000, so £10000 of extra on the 50% . I’m already in cost of around £1500-£2000 and I don’t have 10 grand down the back of the sofa .

is it acceptable/ legal for them to change the price at this late stage ? 

sammyjammy

AFAIK its no different to any house purchase on that front until contracts are signed and exchanged nothings off the table.

Robbym50

Seems a bit wrong to me for a housing association to behave that way , why should I be out of pocket ? 

silvercar

Ask your solicitor. I would have the thought the valuation would be binding on all parties for a set amount of time, but that is only a gut feeling. I mean, otherwise what is the point of a valuation.

sammyjammy said:

AFAIK its no different to any house purchase on that front until contracts are signed and exchanged nothings off the table.

I disagree, staircasing isn't an open market as only the (already part) owner is able to purchase and the pricing would be subject to terms and conditions that are part of the initial purchase contract.

silvercar

I found this on gov.uk: "If you decide to buy more shares, you must buy them within 3 months of the valuation date or a surveyor will need to revalue your home."

https://www.gov.uk/right-to-shared-ownership/buying-more-shares-staircasing

Robbym50

It is within 3 months of the date but may not be if they keep stalling over this . 

The valuation sent to them had two valuations on , short lease ( lease is at 77 years). And valuation with long lease / freehold .  They chose to go with the lower valuation ( the same as they did a year ago but I couldn’t get the mortgage then ) …… now at the last minute they want to go for the long lease / freehold valuation.  

eddddy

Robbym50 said:

The valuation sent to them had two valuations on , short lease ( lease is at 77 years). And valuation with long lease / freehold .  They chose to go with the lower valuation ( the same as they did a year ago but I couldn’t get the mortgage then ) …… now at the last minute they want to go for the long lease / freehold valuation.  

You need to read your lease and/or purchase contract to see the staircasing terms you agreed to when you originally purchased the house.

But TBH, typically HAs use the Freehold valuation.

So it sounds like somebody at the HA read the wrong number on the valuation report.


Presumably, the freehold will be transferred to you once you staircase to 100%. In which case, what the HA is doing seems fair.

You shouldn't really expect a 'discount' because you've let the lease run down to 77 years before staircasing.


But you can try arguing with the HA to see if they'll give you a "gesture of goodwill", on the basis that you wouldn't have proceeded if they had given you the correct info at the outset. 

Robbym50

They valued it in exactly the same way last year , and I specifically asked which valuation would be used , they told me it would be the lower valuation , same as they have this year . I have made a lot of changes over the last year to be able to get the mortgage based on what they told me a year ago and what they told me this year . It’s not me expecting a discount . 

They have moved the goalposts literally a few weeks before exchange of contracts , they chose which valuation to go with after I provided them with both .

I only bought the property 4 years ago and it was never explained to me the problems with the lease being short , I have never owned a leasehold property before , so it’s not a case of me running the lease down .

surely you don’t think it’s right for me to be thousands out of pocket because somebody at the housing association has made a mistake ?

eddddy

As I say, the starting point would be to read your lease to see what it says about how staircasing valuations should be calculated.

I agree that it's shocking that it sounds like the HA has misled you like this. You should complain to them, but I doubt that they are required by law to sell the staircasing at the lower price. Given the circumstances, maybe they'll make a goodwill gesture.


You can also complain to the Housing Ombudsman. But I'm not sure they award compensation for damages - they seem to say they can only award small amounts for inconvenience etc.

Robbym50

Is there a legal reason to stop them selling it to me at the agreed price ? 

After all , they sent the email telling me the price .

Robbym50

Here is acceptance letters .

{Images removed by Forum Team}