Shared Ownership/Negative equity buy out

[maleNeedshelp]

Good evening all,

i have recently split with my partner, but unfortunately we currently live under the same roof for the moment. We live In a shared ownership property which we both put 50% into. After some consideration, my partner would like to buy me out of my share, so that she can keep our girls living in the nice area we live in. I, of course am fine with this, however as my title suggests, we are in negative equity, so I’m not quite sure how this would work.

House was worth £329,000 & we bought a 40% share, which was a mortgage on £136,000. The house has been valued by an estate agent at £290,000. Just looking for some advice on the process. Thanks

Could you leave selling the property till your girls have left home?

Unfortunately not as they’re only 2

i would get the house surveyed by a mortgage surveyor as the house is only worth what the mortgage company will offer.

Will your partner be able to get a mortgage on her own? From what i understand of shared ownership, she is still going to need an income of £75,000-£85,000 on the figures you have said, and you are both going to be out of pocket by £25,000 each - Hence the question about selling when the children are older

It depends on the so lease you bought the property under. The negative equity is sometimes accounted for on a proportional badis. I am surprised that there has been such a large drop in value unless it is a flat without a fire cert. If that is the case wait for the fire safety officer to issue.

However as a first port of call speak to your housing association to see if they are prepared to purchase back part of the property & on what basis.

How do you mean the lease, do you mean the length of time we have the lease?

it’s also a 3 bedroom terraced house

Yes, a surveyor was my next port of call, but I just wanted a rough idea from an estate agent before paying out for a surveyor.

I do not think my ex partner will be able to get it on her own, as she is a part time worker and even with the benefits she will receive when I’m not living there, the mortgage company are still not going to allow her to take on the mortgage, but she wants to explore this avenue

Can she get a mortgage in her sole name?

I don’t think she will at all, but she wants to explore this route

When you buy a SO property you are purchasing the leasehold. The Freeholder is the housing association. You sign a long lease when you purchase the property... Normally for SO it is no less than 125 years this makes you the leaseholder.

The freeholder normally has first call on purchasing the property in a shared ownership arrangement. The lease will set out the time they have to decide if they want to exercise that right. Standard lease is 10 weeks. You as the leaseholder are obliged (assuming standard lease) to tell the HA that you want to sell. They get a surveyor to value the property (RICS red book) and that is the value on which the property is resold in full or part to the HA. If they don't want to purchase it back in part or full then you can ask an EA to find a resale purchaser for it.

Okay, thank you.

So, say it does get valued at £290,000 and by some miracle the mortgage company allow my ex to take on the mortgage, I take it I will just lose out on the money I put in for a deposit?

Your lease and buyers pack will have the information you need.... As previously said the process in your case depends on the lease you signed.

Contact your housing association... That is the first thing you need to do. Without the lease no one can give you more specific advice

And yes possibly you will lose money on the deal.

Thank you. I have contacted the HA & they advised me to get a RICS surveyor to value the property, but I will also look at our lease agreement in more detail

So do as they say. Once you have that you have a position to make a more informed decision.