Selling shared ownership and moving to a new build

JHodkin20

Hi, I'm currently in a shared ownership house (50%) and I'm looking to sell this and move to a new build property (not shared ownership). 

With the new build, I've been told I'm not able to reserve a plot until my current house has been sold. I'm just wondering what would happen if the housing association for my current house find a buyer but the new build isn't ready to be moved into? Would I have to rent temporarily or would the housing association delay the move and allow me to continue living in my current house?

Not sure if this really makes sense but I just don't feel like there's any easy way to go about it all! Any help appreciated!

gazfocus

JHodkin20 said:

Hi, I'm currently in a shared ownership house (50%) and I'm looking to sell this and move to a new build property (not shared ownership). 

With the new build, I've been told I'm not able to reserve a plot until my current house has been sold. I'm just wondering what would happen if the housing association for my current house find a buyer but the new build isn't ready to be moved into? Would I have to rent temporarily or would the housing association delay the move and allow me to continue living in my current house?

Not sure if this really makes sense but I just don't feel like there's any easy way to go about it all! Any help appreciated!

Our first house was a shared ownership so I’ll give my thoughts…

The likelihood of your housing association find you a buyer is slim to none. You’re far more likely going to have to market the house with a traditional estate agent. Obviously different HA’s may be more proactive in finding buyers but there’s not really any incentive for them to do so. 

When you do sell, you will form a chain with the buyer and the seller (or developer) of your new house, so you would ideally negotiate with your buyer a completion date that will allow you to move straight into your new build. 

Just a couple of things to think about from my experience:

1) When we sold our shared ownership house, we had extended ours with a high quality open plan conservatory, had brand new kitchen, newly decorated, etc, and it still took almost a year to find a buyer. In fairness, the market was very different when we sold (around 2018) but shared ownership in general are a bit more difficult to sell. 

2) When you do end up looking for an estate agent, be careful to ask them what they base their fee on. Most agents we spoke to based their fee on the full value of the house even though they were only selling 50%. So in our case, our 50% was worth £67k but the estate agents were still wanting a fee based on £134k. 

3) If your developer offer part exchange, it might be worth considering that option. Your HA will likely allow you the option of selling 100% of the house instead of just the 50%. There might be additional legal fees for this as you’re effectively staircasing to 100% and selling the 100% at the same time but definitely something worth looking into if you can afford a slight drop in sale price. 

4) Final thing I can think of is that if you do go down the route of selling 100% and then accept a lower offer, your HA will still take 50% at what their valuation came back at so you absorb the entire drop in price.

I hope that helps in some way. 

ResourcesShared

Regarding the previous, very informative comment by @gazfocus, Homes England has recently updated its guidance for housing providers (at least, those to whom its guidance applies) regarding resales. As below.

'5.3.38.3 Where a home is sold on the same back-to-back staircasing basis but below the RICS valuation then the provider may receive its share for the staircasing transaction based on the RICS valuation in the same way. It is expected, however, that providers will avoid this scenario wherever possible especially where it would result in significant financial detriment to the shared owner. Providers should, for example, consider the reason(s) the shared owner has been unable to achieve the sale price at the market value established by the RICS valuation. If the shared owner has been attempting to sell at the RICS valuation for a long period and has not been able to secure a buyer, this may indicate that the valuation is not reflective of current market conditions.’

https://www.gov.uk/guidance/capital-funding-guide/1-shared-ownership