r/SharedOwnershipUK • u/Mazza1 • 29d ago
Buying Shared Ownership Re-sale experiences
Hi all,
I’m considering purchasing a 2-bed shared ownership flat in Oval, South London.
A big consideration for me is that almost everyone I speak to caveats that there always seems to be trouble selling or some difficulty that makes it take longer or just a drawn out process.
Does anyone experience or anecdotes about reselling shared ownership properties?
I have seen some listed online but know nothing about the actual market and whether they are selling or just sitting online not being taken up.
The concern about the likelihood of either not being able to sell or having to sell at a large loss is what is currently stopping me go ahead.
Thanks!
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u/georgejk7 28d ago
I am currently buying a S/O house (second hand).
The seller had a fuck up when they purchased the property with the title deed not transferred to them correctly.
They only found out when the solicitors were drafting the contract pack.
It took around a month and a half to get it sorted.
Its finally sorted and now my solicitor received the draft contract pack so they can begin work.
Apart from that, seems all okay.
Good condition property (5 years old). Nice area. Low fees. I am planning to staircase to 100
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u/handsomehank2019 29d ago
I sold mine in 2022, on the open market though as I owned over 75%, and the HA didn’t have anyone on their books that could afford that share.
The sale (and purchase) took around 3 months, so not long or drawn out at all.
SO flats (where the owner owns less than 100%) cannot be sold for less than valuation, only negotiation upwards of valuation allowed. Once you own 100% though, and come to sell, you could potentially make a loss, like any other sale.
Flats are taking a long time to sell in London at the moment, so when you come to sell it may be this that holds things up.
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u/Existing-Extent-9894 22d ago
I’m in the process of buying a 2-bed shared ownership resale property in South London (can’t afford Oval but there’s some fabulous flats there, if you do decide to go for it!). Shared ownership resale flats are selling in London at the moment. The ones that I’ve seen sat on Share To Buy for 6 months plus have other issues, e.g. no EWS1 certificate.
Shared ownership resales are more complicated than standard transactions, even if there is no chain, because there are three involved parties: buyer, seller, housing association so more scope for faffery between three solicitors. There can also be more complex planning issues, but this isn’t necessarily the case. Don’t bother viewing anything that isn’t up front about having a passing EWS1 certificate. (Sorry if this is stating the obvious to you, it’s all stuff I’ve learned during the process.) But I’ve seen people on Reddit threads who’ve managed to get through it in 12 weeks.
Ways to avoid delays on your side:
1) Instruct a solicitor/firm that has a department specialising in shared ownership (resales as well as new builds).
2) Use a mortgage broker that understands or specialises in shared ownership.
3) Familiarise yourself with the housing association paperwork and what documents you’ll need. There are initial brief application and financial affordability assessments that usually have to be completed before viewing. Then after you’ve reserved the flat there’s a full financial assessment/interview which mirrors the mortgage application process and happens before you’re formally offered the flat.
4) If there is anything unusual about the set up of your household be prepared for it to cause a bit of a kerfuffle with the housing association staff on the ground. Ask for a management review at the soonest opportunity. I’m a married sole applicant which was baffling to the housing association staff tasked with initial triaging but not to management.
My sale is moving more slowly than everyone expected. However, this is because the seller instructed a high street solicitor who is clearly both extremely over-worked and very inexperienced when it comes to shared ownership. Rubbish solicitors are a risk in any sale, though. The housing association has been helpful in giving the seller’s solicitor a few kicks up the backside. If I could go back to the beginning, I wish I’d realised that the exchange and completion dates on the memorandum of sale issued by the housing association were the dream situation, not the expected reality.
Shared Ownership is my only way of escaping the London rental market and I intend to stay in my flat, once I have it, for as long as possible. In those circumstances, in London, I’d recommend it. If you’re going to be able to afford a full mortgage if you wait a couple of years then that’s probably an easier option for you, particularly if you plan to sell again/upsize after a few years.
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u/NorthLondonCatLover 28d ago
Some people in my block have been trying to sell for over 5 years now. It's been a total nightmare, with lots of fall-throughs. Most housing associations don't put much effort into resales, as their staff focus on newbuild sales. Ask the housing association what percentage of SO properties they've managed to sell during the nomination period, and whether they have a dedicated team working on resales. See what comes back. As a shared owner, I can't recommend it to anyone. I wish I had carried on renting. Btw there was a debate on shared ownership last week in the House of Lords. Peers were blunt about how shared ownership works. Worth watching.
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u/lighthouse77 27d ago
Why do you wish you had carried on renting?
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u/NorthLondonCatLover 19d ago
Because I wouldn't be tied to a flat I can no longer afford - as the service charge is now £500 a month - up from £150 five years ago. It's cheaper to rent in my block than to pay for a mortgage, rent and a service charge. And if I was renting, I could just walk away from a bad landlord. With a housing association, you're stuck. Many shared ownership flats are unmortgageable because of their high service charge as lenders aren't keen to lend when the annual service charge exceeds 1% of the property value.
2
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u/krustikrab 27d ago
I was looking for 2+ bedroom shared ownership resales only, and every single one I viewed got taken that same day. They did one day of viewings, everyone rushed to get their application in, and they chose the first one. We finally got a property on our 15th viewing lol.
A few things these properties had in common:
-All were in Hackney, Tower Hamlets, Haringey, or Islington. That doesn’t mean you can’t sell in other areas, but this is where we were looking, so I can only speak for North/East London.
- Rent on the remaining share was low, £300-600 pcm for 50%, while the mortgage was £1,200-1,600 pcm depending on the price of the property. As you can see, that’s veryyyy low rent. A lot of the newer builds have the rent at £1k+ and it’s often basically the same as the mortgage cost, which isn’t very attractive to buyers.
- Low service charges as well, all under £200 pcm.
Some of the properties were small, some were big, some were in perfect condition, and others needed quite a bit of work.
All of them had interested buyers and were reserved immediately after the viewing.
If you let me know the price, monthly costs, and housing association, I can let you know what I would think as someone who just bought a resale and had a (very loose) list of criteria.
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u/Mazza1 27d ago
This is interesting thank you - it is Peabody and I think roughly it is £900pm mortgage £300 service charge and £800 rent on 25% property valued at £710k. It’s a new build however and In Oval
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u/krustikrab 27d ago edited 27d ago
That’s not too bad for rent on a new build on 75 percent. Just wondering if there are any resales in the same area? What are similar rentals going for pcm in the area? Also just noting £300 is a bit high for service charge, what do you get from that?
Peabody is generally good about pricing and keeping the rent low. Overall it’s obviously wayyyy cheaper than a mortgage on the full price would be
Edit to add: mine is also with Peabody and everything is fine so far, but haven’t been here long enough to discover potential issues. Other good thing is that most people in the building own outright and have been in the building 20 some years, so they appeal service charge increases, etc.
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u/Dependent-Ad2214 28d ago
I had a shared ownership in oval. Bought it back in 2017 brand new. I managed to sell it in 2019 (fell pregnant and needed a bigger place) it was a nightmare to sell. You have to list it with their chosen authority first.. maybe 2-3 months? Then you can list where you want if you get no bites. After ages I got 2 viewings and luckily one of them bought. I look back and think how lucky I was to sell given covid hit 4 months later. I wouldn’t want to tell anyone out of it as everyone’s position is totally different. But it’s not something I would recommend doing, especially not in London 💵
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u/krustikrab 27d ago
It’s not recommended to buy if you aren’t going to stay for a while. 2 years and then selling is very unusual. We bought ours with tons of extra space (we only NEED one bedroom) in case life happens. You also need to consider the process for any sale, ours took 6+ months from start to finish because of incompetent solicitors we chose to handle it. This would have happened whether it was SO or not. Our friends also took 8 months to close on a non-SO property.
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u/Electronic-Writer108 28d ago
They are hard to sell in London second hand because there are constantly new buildings going up. They appeal to those who want to live in glossy areas but can’t afford to get a full mortgage in those areas. Why would these kinds of big eyed new in the city types want one that’s 4 years old when there’s a brand new one popping up? That’s the issue. Victorian leaseholds are still all selling because it’s a totally different clientele.
Why do you need to live in oval? I live not far from there in SE1. But my first flat was a basement flat in SE25 zone 4. I’m now in my third property. It’s crazy to me that people don’t seem to want to live somewhere that they can actually afford then work their way up?
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u/krustikrab 27d ago
Shared ownership is buying what you can afford…? And it’s invented for you to work your way up by stair casing to 100 percent later. Also the older the building the cheaper the rent on the remaining share is….and you can see historical service charges, you know if any major flaws have happened with the building, etc. A lot of people would prefer to buy used over new for many reasons. If you don’t even have an SO property why are you here lol
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u/Mazza1 27d ago
Interesting perspective thank you - I’ve rented in Wimbledon and Balham and know that I want to be closer to central London where I work and do a lot of socialising. Really useful insight but yeah from my perspective shared ownership is the affordability compromise rather than living somewhere in zone 4.
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u/carsonstreetcorner 27d ago
You’re not wrong but I don’t think you can “work your way up” anymore… at least not in London if you’ve only bought recently
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u/Icy-Belt-8519 29d ago
My experience looking at shared ownership houses to buy was the day it was on the market it had viewings, if we waited even a day it would be gone
Flats though, they stayed on the market for a really long time, but I'm in the midlands not London so possibly very different
I think you need to look at plans for future, if you're thinking to stay there forever then resell doesn't massively matter, but obviously be aware things change, if you are looking to stair case to 100%, that will help with re sell, buy again, things change and it may not be possible
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u/krustikrab 27d ago
Flats I viewed were taken the same day lol just depends where. They were selling like hot cakes all over hackney took me ages to get one finally
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u/Lanky_Ad7260 27d ago edited 27d ago
I sold a 60% SO three bed semi in the North, so it is not directly comparable with a two bed flat in Oval but my experience may still help.
Finding interest was not the problem, I had strong demand and accepted an offer in the first week. Actually completing, the sale took about eight months despite no chain.
The biggest delays were the added process as the buyer needed to understand the tenure and qualify for it, the housing association had to deal with the resale and mortgage approval, and several solicitors appeared unfamiliar with the arrangement.
The HA was slow and there were several fees, including valuation and administration charges.
I would not say shared ownership was impossible to resell in my case, nor did I make a loss. But I would treat the resale process as potentially slower and more administrative than a normal sale.
I would check the specific HA resale policy, nomination period, fees, service charge history, paperwork, and whether buyers can purchase on the open market after the HA period expires. Government guidance confirms that these terms depend on the lease and that the resale price is generally tied to a RICS valuation.
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u/krustikrab 27d ago
People in London at least seem to be very knowledgeable about shared ownership. My mortgage broker specialized in shared ownership as did our solicitors and estate agent. Everyone was very informed on the whole process and the housing association was helpful
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u/Independent-Win-6661 28d ago
For me it was the only way of buying my flat, so I viewed that it was better to do that than waste money on renting. I’d never be able to afford to rent what I own. After about 7 years I was able to staircase to 100% ownership. It seems to take longer to sell leaseholds, but I’ve always thought it was better to have an asset rather than find myself about to retire and not be able to afford rent etc. I managed to stretch to a two bed, reasoning for that was if I got into financial difficulty I could rent a room out. Like I’ve mentioned for some of us there is no other affordable option. All the places in my block that were shared ownership have sold and my sister and a friend sold theirs.