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London & Quadrant (L&Q) Shared Equity

Please help!
Has anyone else been in this position?

I took out a shared equity loan with L&Q in December 2009 for 50% of the value of my property and a mortgage for the other half. The term was for 25 years. I am presently paying rent to L&Q and a mortgage.

What happens if I am unable to staircase and own 100% of my property by the end of the 25 years?

 As a single mother I have been unable to afford to staircase over the last 14 years. I have just retired from teaching in London and now I definitely cannot afford to staircase and buy the other half of the property or even a bigger proportion.

There are 11 years left until the term is up. If I have to sell the property to repay the money to L&Q then I will be homeless at the age of 77. I will be too old for a mortgage and living on a pension, probably struggle to pay rent on the open market.

I want to be allowed to stay in my flat and continue to pay rent to L&Q. They have been unable to give me a definitive answer to my question.

As this is a government scheme I find it shocking to think that others, like me, will have to give up their homes.

During the last 14 years I have replaced the leaking roof, made the electrics safe and just paid for a new combi-boiler!!

Comments

  • Maybe consider going back to work, get a budget together and a plan for achieving your goal of 100% ownership.

    Potentially it should have been a part of your plan before retiring.
  • lika_86
    lika_86 Posts: 1,736
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    Taking on this sort of mortgage in London was always going to be a risk. Prices have risen dramatically over the past two decades in most areas and so unless you could really increase your income or got some sort of inheritance, the house was always going to get away from you.

    I'd have thought that once you've paid off your 50% then you should just be allowed to continue to rent, but you should check what you actually signed up to.

    What is your 50% likely to be worth now? If you did have to sell up, would that buy you a place somewhere else? Almost certainly it would in some parts of the UK.
  • eddddy
    eddddy Posts: 16,157
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    Shez57 said:

    I took out a shared equity loan with L&Q in December 2009 for 50% of the value of my property and a mortgage for the other half. The term was for 25 years. I am presently paying rent to L&Q and a mortgage.

    What happens if I am unable to staircase and own 100% of my property by the end of the 25 years?


    I'm no expert on this - but are you muddling up "Shared Equity Loan" with "Shared Ownership"?

    You mention...
    • Staircasing
    • Paying Rent to L&Q 
    Those things only apply to "Shared Ownership" - they don't apply to a "Shared Equity Loan".

    And you mention "50%" - I thought the maximum Shared Equity Loan in London was 40%. (But you can have 50% shared ownership.)

    And you say you bought in 2009 - I thought Shared Equity loans were introduced in 2013.


    It might be very helpful if you clarify this, as the answer would be very different for "Shared Ownership" vs "Shared Equity Loan".



  • user1977
    user1977 Posts: 13,400
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    Shez57 said:

    I want to be allowed to stay in my flat and continue to pay rent to L&Q. They have been unable to give me a definitive answer to my question.

    What discussions have you actually had with them?

    I also suspect you're talking about shared ownership, in which case (1) staircasing is optional, and (2) it's your mortgage (on the 50% you own) which has a 25 year term, not the other 50%.

    Once you have paid off your mortgage, you carry on paying rent on the 50%, so you only need to worry about being kicked out if you can't afford the rent.

    This should all have been explained to you at the time you bought - maybe you still have the paperwork from then which should explain things.
  • kingstreet
    kingstreet Posts: 38,616
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    eddddy said:
    Shez57 said:

    I took out a shared equity loan with L&Q in December 2009 for 50% of the value of my property and a mortgage for the other half. The term was for 25 years. I am presently paying rent to L&Q and a mortgage.

    What happens if I am unable to staircase and own 100% of my property by the end of the 25 years?


    I'm no expert on this - but are you muddling up "Shared Equity Loan" with "Shared Ownership"?

    You mention...
    • Staircasing
    • Paying Rent to L&Q 
    Those things only apply to "Shared Ownership" - they don't apply to a "Shared Equity Loan".

    And you mention "50%" - I thought the maximum Shared Equity Loan in London was 40%. (But you can have 50% shared ownership.)

    And you say you bought in 2009 - I thought Shared Equity loans were introduced in 2013.


    It might be very helpful if you clarify this, as the answer would be very different for "Shared Ownership" vs "Shared Equity Loan".



    Prior to HTB equity loan there were forerunner shared equity schemes such as Homebuy Direct and FirstBuy. Many developers also offered their own shared equity schemes.

    It could be shared equity with ground rent & service charges on top of the mortgage and as you say, it may also be shared ownership.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
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