We’re stuck in our flat

eamyers

Backstory: 
We bought 75% of a shared ownership property in 2017. 2 bed flat in Hertfordshire. 

Since had 2 children and would like to move on. 

Price we bought at £297,500

Early this year put the property on the market, valued at £280,000 by independent rics surveyor. Little interest so have lowered to £270,000 ourselves, this is based on the market/ similar properties in our block. We have had viewings but still no offers. At that price after sellers fees we break even. 

 Current rates mean our mortgage is sky high, fixed mortgage is not possible due to early exit fee (which will leave us in negative equity) if we sell in next year or two. 

We cannot rent as we don’t own outright. 

We cannot save as we’re paying over £1600 on mortgage and rent, nursery fees. Our budget calculations show that after everything we have £100 a month left over. 

Have contacted citizens advice, mortgage lender and independent financial advisors. Citizens advice helped us go over budget, mortgage lender can’t help as we have money left over every month and independent financial advisor told me yesterday they can’t help in our situation. 

I would like to know what our best bet is. I know that most our struggling. 

In an ideal world, we’d like to move and rent a house. We know home ownership is unlikely unless we get money from parents which isn’t going to happen. 

We feel trapped in our flat, it’s tiny, we want a garden and more space for our family. 

Is there anything we can do? 

Thank you for reading if you got this far!

silvercar

Sell up and rent.

why isn’t it selling? I’m also in Hertfordshie and any flats would show a big increase since 2017 prices.

caprikid1

silvercar said:

Sell up and rent.

why isn’t it selling? I’m also in Hertfordshie and any flats would show a big increase since 2017 prices.

The problem is that shared ownership property combined with new build can add to quite a premium sadly, Shared ownership is more for the house builders to move property, if shared ownership did not exist builders would have no choice but to drop prices so the likes of the OP could afford to buy.

They are unfortunately one of the great housing cons of this government that help keep house prices high.

All you can do is wait or drop the price, I cannot see any easy option.

Can family lend you the shortfall and then drop the price or a persona loan once sold to cover the shortfall ? I would expect renting it would not pay to be honest even if you could staircase to 100%

gwynlas

As you have found out new build  shared ownership are overpriced compared to open market properties. 
Until the situation improves I would advise that you make the most of a bad job and stay put. You have two children in a two bed flat and many families do not have the luxury of a garden.
 A 75% share is quite high for someone looking to buy shared ownership so you would be better off staircasing to 100% where the property could be sold to owner occupier or investor.

EssexHebridean

You have the added issue of the shared ownership aspect,  but there is no question that flats have been slow to shift this year in the Herts & Essex areas. We sold ours earlier in the year - also a 2 bed. went on the market in January, and took 4 months to get an offer we were willing to accept. Price was right, initial agents weren't the best which didn't help, but FTBs just weren't buying, and that was the primary market for ours. 

Have you checked whether you might be in a position to finance to staircase to 100% as suggested above? This could be worthwhile looking into if it makes the property more attractive to buyers, although unless you paid all possible stamp duty up front with your original purchase, you may have further SDLT to pay. 

Also - have you enquired with the HA whether they are aware of anyone wishing to buy currently, or even if they may be interested in buying back? 

housebuyer143

Be careful as I have read that if you choose to lower the price below to RICS valuation then any reduction comes 100% from your share, not the HA. 
The HA will expect their share based on the RICS valuation not the lower sold price.. I'm not sure if that's the case here but I would check to be sure.

RHemmings

housebuyer143 said:

Be careful as I have read that if you choose to lower the price below to RICS valuation then any reduction comes 100% from your share, not the HA. 
The HA will expect their share based on the RICS valuation not the lower sold price.. I'm not sure if that's the case here but I would check to be sure.

Ouch! That could really put some (part-) owners in a very difficult position. Can the valuation be challenged? 

NameUnavailable

Bad time of the year to try to sell a property. I would take it off the market until the spring and put it back on at the higher price.

dell12

Having sold shared ownership homes in the past, I'd say with 75% ownership you're in a tricky position.

Generally shared ownership is easest to sell at a 25-35% share (and generally a lower income being required) or you staircase to 100% and sell it privately. 

In your case you have some or most of the requirements set out by the housing association to meet in terms of finding a qualifying buyer, but they will have to earn close to what someone would need to earn to buy it privately (but not exceeding the £80-90k household income cap). That significantly narrows your market.

If you can, I'd try to staircase to 100% and sell it privately, but I appeciate in the current rate environment that's not an easy thing to do,

GDB2222

silvercar said:

Sell up and rent.

why isn’t it selling? I’m also in Hertfordshie and any flats would show a big increase since 2017 prices.

The Nationwide calculator shows a 10-15% increase over that time. But, there may have been a new build premium of 10% in the original price paid. 

Sistergold

I can imagine that it can be tight in a two bed flat but it could be worse. Rental is also a different kettle of fish. I would personally sit tight and thank God for a roof over my head at the same time I will now look at increasing my income. I will then save to staircase to 100% as recommended by others. It’s also worth watching tiny houses on YouTube and soon you realise that tiny size is not the end of the world. After the pandemic I just realise life is too short and as a parent do the best you can but don’t always stress for the next big thing.