Shared ownership flat has lost significant value – what are my options?

Siancoll

Hi, I'm hoping for some advice on what options I might have with my shared ownership flat.

I bought a 25% share of a London flat around four years ago, when the full market value was £685k. I put around £50k of my savings into buying it.

My partner and I now want to live together and ultimately buy somewhere together. My flat isn't big enough for us longer term, so I'd planned to sell it and use my equity towards our future home.

The problem is that the flat has now been RICS valued at £605k and, despite being on the market at that price, I've had very little interest. I'm now being told I may realistically need to sell nearer £525k.

Over the four years I've owned it, my rent on the remaining share and service charge have also increased significantly. That's pushed my monthly outgoings up and made it much harder to save alongside the property. At the same time, much of my mortgage payment has gone towards interest, so I haven't built up a huge amount of additional equity through the mortgage either.

I put effectively my entire life savings into buying the flat, and selling at the sort of price now being suggested could wipe out everything I put in and potentially leave me with nothing or even owing money after costs.

Aside from the loss itself, the flat was also my financial safety net. The idea of giving that up completely to move in with my partner, knowing that if anything went wrong I'd essentially be starting again financially, is pretty frightening.

It's hard not to feel like I've been conned by the whole thing, particularly given shared ownership was presented as a way to get onto the property ladder. I also feel pretty stupid for having put so much of what I had into it, although at the time I genuinely thought I was making a sensible long-term decision.

I'm now trying to work out whether I have any other realistic options. One I'm exploring is staircasing from 25% to 100%, remortgaging and renting the flat out, while hopefully still being able to buy somewhere jointly with my partner in future.

My mortgage balance is around £110k and I think the flat could rent for roughly £2,000–£2,500+ pcm.

I'm speaking to mortgage brokers about whether that route is actually possible, but I'd really appreciate thoughts from anyone who understands shared ownership or has been in a similar situation. Is there anything else I should be considering?

TheGoonies1985

Unfortunately property prices can go up or down, recently it's all been great and up up up.

With new builds and schemes you pay a premium and it always took some time for those properties to get back to what was paid and then increase in value but even that has stopped with property prices just not increasing as they once did.

Whether or not it makes financial sense to rent us something to work out but do you really want to be a landlord and know what that entails and if you stopped getting rent for three months do you then have the money to evict someone as well and can take that financially?

silvercar

Problem with new build flats is they are overpriced, especially shared ownership. Once they hit the second hand market you’ve lost the new factor. The shared ownership may still make it attractive to people. Valuations are going to be tight at the moment, particularly for flats, where everyone is concerned about service charges.

Presumably you can’t rent it while it’s still shared ownership, so buying the remaining share really, is investing further in a flat which isn’t holding good value compared to other properties. The only upside is that the valuation for the remaining share should be that much lower. The way the tax rules work on rental income means that a high mortgage is going to cost you a lot of profit as interest as an expense is restricted to basic rate, whereas the rent together with your income from earnings could push you into the higher rate. So you could end up paying tax on a loss. Worth running through some figures with a mortgage advisor.

Worried_fool

If you are even thinking of becoming a landlord, visit the relevant group on Facebook and read what current landlords are saying about their experiences.

jaybeetoo

Many people believe that property can only go one way and that just isn’t true. Worse, people who invest in property often put all their eggs in one basket (you often see people in money sections of the paper saying property is better than a pension and that’s just bonkers from a risk perspective). Shared ownership, IMHO, is a bad idea. I’ve always recommended to my sons that they don’t touch it with a barge pole. You “own’ 25% but you are 100% liable for maintenance, repairs, council tax and management charges, I do think that people like yourself were sold a dream of home ownership but the cons of what you entered into, were not fully explained, emphasised or understood. Sadly, you either keep the flat in the hope that prices may rise again (this may take many years) or you take a hit now by lowering the price so you can sell as soon as possible. People over a certain age, will be well aware of negative equity. On a positive note, any home you want to buy will also have gone down in price since the peak. I feel for you.

gm0

Also consider carefully your location in London. And the supply vs demand of blocks and ownership structure (big corporate BTL etc.). Especially if there is still new supply and nothing unique about this unit or this block

This will continue to "cap" the market for resale. And net. So after any fittings/stamp duty incentives or other inducements offered by developers on new units. Yours slightly worn. slightly older - will need to be cheaper than the current developer clearance price to attract interest.

poseidon1

The London property market has been considerably over priced relative to average salaries for a very long time, so unsurprisingly some form of slow down or outright correction was likely to arise.

As you will see from the article below the considerable log jam with unsold flats is England wide with London leading the way, so even if you were prepared to suffer the complete loss of equity on sale, there is no gurantee you will find any takers especially with an overpriced shared ownership - a prospective new buyer would face exactly the same factors you are now trying to escape from -

https://www.theguardian.com/money/2026/aug/08/flats-in-england-not-selling-slashed-prices-buyer

Assuming you are allowed to sublet under the terms of your lease agreement, it is not risk free. There are very good reasons why small landlords have been fleeing the sector in their 10s of thousands.

However given you may have no option but to try and go down that road, bear in mind as your rent and service charges increase annually, your rental charge to a tenant may not cover your entire outgoings so you may end up having to subsidise the 'investment' from your own pocket.

Sadly, not what you would like to hear but this is very much the status quo for a great number of flat dwellers and the shared ownership structure aggravates matters. So regrettably a question of either making the best of a bad situation or try to walk away from the mess with potential adverse consequences on your credit rating.

SarahB16

I'm very sorry to hear of the situation you are in.

In my opinion, you should sell it for whatever you can (i.e. do not attempt to staircase to 100% and rent it out).

I know very difficult but I honestly believe that is for the best. Move in with your partner and then hopefully the two of you can buy something together in the future.

Edit: To add, I would do this as quickly as possible and accept reasonable offers.

If you live with your partner and are hardly at your flat then hopefully your flat will look immaculate and you may get an offer for it.

HHarry

Do you even have the option of seling at £525k? With some Shared Ownership schemes the Association holding the remaining % dictates the price. You may be willing to accet a lower offer, but that in effect lowers the value of their share.

I’m sorry it’s al so rubbish. My daughter is in SO and it really isn’t the great step onto the housing ladder it was sold as.

Caz3121

is stair casing / renting actually an option?

If valuation £605k you would need an additional £453,750 to buy the other 75%…add that to your current mortgage and you would likely need to be earning £120k+ for affordability for the mortgage

Whilst income less important for a BTL, many are capped at 75% LTV so you would need an additional lump sum to add to bring the LTV down and it does not sound like the rent payment would cover the mortgage payment

Difficult situation to be in and unfortunately no-one knows what will happen to market in future to know whether best to take hit and offload now or wait to see if there is any recovery.

Siancoll

Thanks everyone, really appreciate all the responses. Definitely a lot of food for thought here and a few things I hadn't considered.

Just to clarify on the £525k, that's based on a very similar flat in the same development selling for around that recently, rather than just a figure the agent has plucked out of the air.

The staircasing option is something I'm going to properly look into. At £605k I can't see how it would work financially, whereas at something closer to £525k it potentially becomes a different conversation. So I think my next step is speaking to the housing association about the huge gap between the RICS valuation and what flats are actually selling for, and what that means for both selling and staircasing.

I'm also speaking to a couple of mortgage brokers to understand what's actually feasible. I completely take the points around the risks of becoming a landlord too – I'm definitely not set on that route, just trying to make sure I've explored every option before accepting such a huge loss.

Thanks again, it's genuinely really helpful🙌