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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

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Original poster

to fully buy my shared ownership property and rent it out

70 replies

WyclefJohn · 22/04/2018 05:55

I bought a percentage of a shared ownership flat about 5 years ago. My financial situation has improved, I have moved away, and I am now able to buy the whole flat, and I could rent it out as an investment. I have checked with the housing agency and they say this is fine. The flat lies in an area of mainly social housing.

Would I be unreasonable or unethical to do this? The alternative is I sell my share, and give someone else the opportunity to buy a shared ownership flat. To some extent I am removing a property from social housing.

(Full disclosure: I posted about this the other day, but I didn't clarify the nub of the problem and only got a few replies)

OP posts:

Minniemountain · 22/04/2018 14:54

Shared ownership leases have their own format. Once you own 100%, you will be left with a fairly standard flat lease. The housing association should have information on the process.

Minniemountain · 22/04/2018 14:58

Your lease will probably have key information right at the end explaining things.

africanprincessinscotland · 22/04/2018 15:04

My understanding is that with SO, the long term plan is that the tenant will over the years buy a bit more and a bit more until it fully belongs to them. That's what you're doing. It's no longer social housing. So no, you're not unethical. Unless you think everyone renting out a second property is unethical. Unfortunately some people do think that! I had to giggle at the poster who said they owned several properties, but that you we're unethical. Hypocrisy much? If you are planning on being an ethical LL, charging an affordable rent and with long term leases, then you may well be helping someone who otherwise couldn't rent a property. That HA is not going to put that property back out to rent, is it? For many people, even SO is out of their reach, so they need LL's like you. Good luck

Cheerymom · 22/04/2018 15:41

Shared ownership is to help you get on the property market. If you buy it, staircase to 100% mortgage, of course you can sell it. It is NOT designated social housing, I assume you are a key worker and it was your only way to buy. Good for you.

Original poster

WyclefJohn · 22/04/2018 20:24

I was considered a key worker when I bought my flat - in education. So yes, I went through the necessary checks. I agree that it's not social housing in the same way that former council houses were. The intention is to staircase to 100%, and since meeting my partner I am able to do that.

I also thought it was a bit hypocritical of a poster to say I was being unethical even though that was what they were doing. I'm still weighing this up ethically.

OP posts:

Cheerymom · 23/04/2018 08:37

I did the same, it took me 12 year and in that time I spent nearly all my wages paying rent and a mortgage and working in an inner city school. I really do not see any reason why anyone would ever consider this unethical. It's a scheme to enable key workers to get on the property ladder and you have.There is nothing illegal or unethical, I think a lot of posters are confusing it with council housing. Nor is it cheaper than a full mortgage it just allows you to get a mortgage for the PART you BUY and pay the rent and service charge on the rest.To OWN it all is the whole point f the scheme.

Andromeida59 · 25/04/2018 06:50

Hi OP,
Well done on being in this position. I personally don't think it's unethical but for your piece of mind or would check the length of lease and also any covenants on the property. If you lease is only for a few decades I would suggest selling the property and buying an older property as older properties tend to have far longer leases (we are LL and our property has a lease of 999 years, this removes any opportunity to be screwed over when the lease is renewed).
Also, renting in a HA is a riskier area. We've rented out to high risk tenants and low risk tenants and the low risk is definitely more stable and profitable meaning that we know we can 100% pay our mortgage each month.
Regardless of where you live in the UK, you will need yearly checks on gas safety etc. Also worth remembering that certain insurers will not co we you if renting to tenants on any form of benefits.
Our former home is our LL property. Some say it is unethical but we're good LL and we will use this as a pension pot, one day.

Emma198 · 25/04/2018 06:55

I had a 25% share I sold last year. Initial shares seem to sell for more than they're proportionately worth so be careful you don't end up paying over the odds. My whole property was worth c150k but 25% share was valued at 41k. Someone went on to pay 55k. If he was to then buy the other 75% for the 112k it's worth, he's have paid nearly 20k over the odds overall so careful you don't end up in that position!

DuchyDuke · 25/04/2018 06:58

It would only be unethical if you then didn’t rent out to people on DSS /Housing benefit.

Graduate223 · 25/04/2018 07:00

You won’t get a medal for being a martyr. If you can legally rent it out and will be a good landlord and keep up to date with legislation etc., go for it.

Cheerymom · 25/04/2018 11:17

Duchy duke why? It is NOT council housing. It is given to KEY WORKERS i.e. teachers, nurses to enable them to get on the property market, it is NOT cheaper than private renting. There are OTHER schemes for DSS etc, please read previous posts.

Bluelady · 25/04/2018 11:23

The fact that you have qualms indicates that deep down you believe it's unethical and feel uneasy about doing it. Only you know if you can live with your conscience if you buy it all and rent it out. I wouldn't.

Cheerymom · 25/04/2018 11:25

Bluelady, please read my post above, it is NOT SOCAIL HOUSING>

Bettiedraper · 25/04/2018 11:26

If you were planning to charge a discounted market rent then I think it would be ethical to do this.

Bluelady · 25/04/2018 11:27

Where did I say it was?

Cheerymom · 25/04/2018 11:29

You didn't but you said 'I wouldn't ' why? I'm curious why you and others feel this as the point to shared ownership os to allow key workers to buy homes in areas they work in so what on earth is unethical about doing just that.

Sprinklesinmyelbow · 25/04/2018 11:30

Of course you can. There is no ethical dilemma at all. Shared ownership is designed to get people on the housing ladder. It’s designed to be sold in full. What you do with it after is your business.

It’s not the same product as social housing

Bluelady · 25/04/2018 11:31

I said I wouldn't. You disagree with me. Let's just leave it there.

Cheerymom · 25/04/2018 11:34

Just curious as to why? Surely the teachers nurses etc of the world deserve an opportunity to buy a property in an area they work in. I think most people posting do not realise the point to social housing. That's all, no different to renting or selling private property and in fact iit is initially more expensive . It is a way to keep key workers in an area. In fact OP do YOU understand as having an ethical dilemma seems very odd.

ShinyShooney · 25/04/2018 11:36

It isn't social housing though.

Its just affordable housing. Shared ownership are being created all the time. The goal is to staircase and fully own, then it is no different to buying outright. Of course you can rent it out. There is no moral issue.

Sprinklesinmyelbow · 25/04/2018 11:38

I also don’t understand the ethical issue. It was build as affordable housing. The whole point is someone buys it in full eventually and are then a homeowner when they wouldn’t struggled to be otherwise

It’s nothing to do with rental stock. It’s a different product.

Sprinklesinmyelbow · 25/04/2018 11:40

Actually i imagine that PP have just got mixed up and think OP is talking about right to buy ie a social rented unit she bought.

Just to clarify this is totally different.

However OP is stil be interested to know why you think it’s an ethical dilemma?

Original poster

WyclefJohn · 25/04/2018 12:12

However OP is stil be interested to know why you think it’s an ethical dilemma?

First of all, there is some confusion here between social housing and shared ownership strictly, although it was a housing association that I bought through, so it's kind of social housing, but I also see that the ultimate intention is to buy it completely.

My ethical concern is this. I bought a share of my flat, and I was very happy to get a foot on the housing ladder.

If I sell my share in the flat, someone else will have the opportunity to buy a share in the same way I did. If I buy it 100%, as I have the right to, I can rent it out at market value, and I've directly taken the opportunity away for someone else to get a foot on the housing ladder. That's my concern.

OP posts:

Cheerymom · 25/04/2018 12:58

No OP that's not how it works, it is not meant to be a continual thing, believe me, my partner worked in housing for years in London (Peabody,) and I went through this scheme. You are not obliged to provide anyone else with an opportunity to buy then is NO law, remit or expectation to do so in any housing association. Is it a SHARED OWNERSHIP scheme or not? If so your guilt or concern is misplaced.

Cheerymom · 25/04/2018 12:59

No such thing as 'kind of social housing', its key worker scheme, nothing in common, read your original documents.

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