Stuck in unsellable shared ownership flat with rising service charges and debt – can’t see a way out

johnsof75

Hi everyone,

I would be really grateful for any advice or perspectives, as I feel quite alone dealing with this and am struggling to see a way forward.

I earn a relatively good income (circa £80k per year in central london) and historically had no debt. However, since around 2020 things have gone wrong. Following a period of ill health (during which I was on nil pay), family and employment issues (culminating in my taking legal action), I used up all of my savings and have since accumulated around £70k of unsecured debt across approximately 8 creditors.

I have been working with StepChange and have agreed a debt management plan, but I am increasingly concerned about whether this is sustainable given my housing situation.

I live in a one-bedroom shared ownership flat that was originally marketed as “affordable”. When I moved in, the service charge was around £115 per month. It is now close to £600 per month, with an increase of over £100 in the last year alone. My rent and mortgage costs have also increased.

My concern is that if these costs continue to rise, I simply won’t be able to afford to remain in the property in the next couple of years.

The difficulty is that I appear to be completely stuck:

• No flats in my building have sold since I moved in (over a decade ago), so selling does not seem realistic.
• As a shared owner, I need housing association approval to agree a price and sell, and there are significant upfront costs involved.
• My lease does not allow me to rent the property out .

This means I feel trapped — unable to move, unable to reduce my housing costs, and unable to plan for the future (including starting a family or potentially relocating to support my elderly mother). It is all feeling pretty hopeless.

I am trying to take responsibility for my situation and deal with my debts, but I am concerned that the underlying issue is the ongoing increase in housing costs, which feels outside my control.

I would really appreciate any advice on:

• Whether a debt management plan is still the right approach in these circumstances;
• What options might exist where a property is effectively unsellable and unaffordable;
• Whether there are any routes within shared ownership schemes that I may not be aware of;
• Or any other practical steps I should be considering.

Thank you in advance — any thoughts or experiences would be very welcome.

HampshireH

Anything will sell at the right price.

Have any of your neighbours actually put their flats on the market and not sold or is it an assumption you won't be able to sell?

Personally hate the shared ownership model and agree it can be a bit of a trap in cases like this.

However, could you get the same elsewhere for less once you factor in all associated costs? Because if not is moving a feasible option in the first place?

Have you spoken to the HA? They do have costs but they aren't usually unrealistic. That said advice from them is free so worth taking.

ArtyJ931

my brother sold his tiny shared ownership flat under the exactly scheme you mention (via the housing association) and they had a list of people who wanted to view and two offers before they had even looked at it before it was officially in the market so I wouldn’t worry too much about that. In London- it will sell.

johnsof75

Thank you very much for the replies — I really appreciate people taking the time to respond.

Just to clarify, this isn’t an assumption on my part. Two flats in my building have been put on the market during the time I’ve lived here (over a decade) and neither sold. One of those has recently been relisted via a mainstream estate agent after previously being marketed through the shared ownership route for around three years without success.

My understanding is that the Housing Association has been reluctant to agree to significant price reductions and has not been willing to buy back shares, which has made it difficult to move things forward.

I do appreciate that others have had different experiences and that properties can sell at the right price, but in this particular building there does seem to be a pattern of limited movement.

For context, of the 40 flats in my block only around 8 remain shared ownership — the rest are now rented out by the Housing Association.

A close friend of mine in the same building (identical flat on a lower floor) also tried to sell for several years without success and has since reduced her working hours as a teacher and is now receiving Universal Credit, which covers her housing costs.

I will take on board the suggestion to speak to the Housing Association again — I agree that’s a sensible next step — and I am also trying to understand what realistic options exist if selling proves difficult.

Thank you again — I’m finding the different perspectives really helpful.

johnsof75

Just to add — one option I have considered is relocating to a lower-cost area and taking a similar role on a lower salary, as my work could potentially be done from another location.

However, my concern is that if I don’t resolve my current situation (particularly the flat and existing debt), my credit rating may be significantly affected, which could make it difficult to rent, let alone buy, elsewhere.

So I’m trying to understand the best way to deal with the current position in a way that still leaves me with viable options longer term.

gwynlas

For clarity your service charge equates to £7,200 per year which sounds wrong. Does this include amenities such as heating and hot water?

teaselMay

There is a mechanism within shared ownership for the housing association to buy back your share, especially if they've other rentals in the block it's worth asking if that's a possibility

Sometimes things that don't sell at one time fly off at another. I was able to buy my shared ownership because they were so slow to sell that I was offered an incentive, but less than a year later next door is selling and is sold stc within a week.

ManyWays

How much equity do you think there may be in this flat? A range, not including the very optimistic end…

ArtyJ931

https://forums.moneysavingexpert.com/discussion/comment/81952816#Comment_81952816

I wonder if the £600 is the rent for the non-owned part?

RAS

This thread might be better in the House Buying, Renting and Selling forum?

ManyWays

https://forums.moneysavingexpert.com/discussion/comment/81953102#Comment_81953102

Not really, at its heart is a massive debt problem