Can anyone share their experience of buying a shared ownership flat?

[Hayden2012]

Hi Everyone!

Could you please share your experience on buying a shared ownership flat?

Recently, we found an ideal shared ownership flat and made an offer slightly higher than asking price, as the vendor said she is leaving the country and it’s effectively chain free. So we assumed that she will want to leave some of her stuff behind and we wanted to make a deal. Obviously we believe d that the RICS valuation won’t be changed. But it turned out, the vendor managed to get another valuation report done just after we made an offer, reflecting the initial higher bid of ours(!) which resulted in higher RICS market value than the original.
We were dumbfounded! Can this shared ownership flat RICS market value can be changed by a prospective buyer? We thought when it comes to selling & buying it, it’s fixed and you can only sell or buy the % you own the property. What is more, the housing association seems to be easy about it, when we asked for a clarification. It’s very confusing , from all the information about Shared ownership policy we read clearly says the agreed price is no more than the RICS valuation.
Have you guys had any thought on this?

Now the vendor has itemised all furniture with price for remaining , on top of the price we made an offer.

I have no experience but you may wish to ask MN to amend the title of your post...

Yes, I know that I rushed to post it, and didn’t finish the title properly. And I didn’t know how to edit it.
Thanks for your advice!

Hi, OP. We've edited your thread title now - hope that's useful.

So you offered higher than the initial RICS valuation because you wanted some furniture in the deal? Did you speak to the seller before hand and tell them that’s what you wanted to do? You wouldn’t usually add the cost of fixtures and fittings to the price because it bumps your mortgage up

My first flat was shared ownership, I can't comment on your exact circumstances as it seems pretty specific to your situation. But I would say that I wouldn't recommend shared ownership. I'd rather rent than be a shared owner it's the worst of both worlds.

We were constantly hit with repair bills from the housing association for 'shared areas' that we had no access to, and other repairs we didn't even know had been carried out/werent asked about.

Also the housing association would not pay towards any upgrades or changes. For example we desperately needed new windows as they were not secure or water tight but the HA wouldn't split the bill, so we were faced with paying out £5k for new windows we only owned 25% of (we sold instead). Likewise the kitchen and boiler needed replacing but HA wouldn't split any of the cost.

The rent increased well above inflation year on year.

When we went to sell we could only sell to anyone who fitted the shared ownership criteria which really narrowed our pool of buyers.

Honestly it was a huge mistake and I wouldn't do it again.

I'm sure I fully understand what you're asking however I can tell you a story about valuations when I sold my shared ownership which might help what. I'll try and keep it short and simple! You have to get a RICS valuation which is then agreed to by the housing association association. We got ours, it came back much higher than expected. Amazing news as we owned 60% and potential for our next property was higher. Estate agent agreed we could sell for a similar amount, great. Housing association called me, said another flat in the block of the same spec was just valued considerably lower (I think nearly £100k!), suggested I get another valuation as they didn't think it would sell. At some point after this ( and I don't remember how or when) I discovered that because they agree to the RICS valuation, if you sell for over that agreed amount you get 100% of the difference - not the % you own! So I went to the surveyor who did the other flat, got a new low valuation which I knew the HA would agree to and then sold at the original high valuation price. It meant I walked away making £100k from the property! Does that make sense? Here's a simple calculation. Say the Second lower valuation is £400k, i get 60% of that sale. If I sell for £500k I get the full £100k difference plus £240k (60% of £400k). People warn against shared ownership but it worked for me and allowed me to buy a house I never thought i could afford.

Also to add it's not true you can only sell to shared ownership buyers. You have to list as shared first, for a fixed period of time (sorry I can't remember how long for) and then it can go on the open market. We sold on the open market