Shared ownership mess!

duanea

I am looking for some advice about the Shared Ownership Scheme.

We bought an apartment through the scheme in 2007 for 275,000 we borrowed 125,000 and rented the other 125,000 from the council and added 25,000 ourselves. We are now in massive negative equity (as most people are) and are paying 1100 a month between the rent and mortgage. DCC are impossible to get in touch with and we dont really have a clue where we stand with regard to what happens if we want to sell or get out of the 50/50 contract.

Looking at the terms and conditions of the scheme it seems to have only been written with a view to house prices increasing. The councils equity increases every year to encourage the borrower to transfer into 100% ownership as soon as possible. Most people transfer within the first 2-3 years. However if you dont transfer within the first few years the mortgage repayments are actually passed out by the increased equity held by the council. It's a lose-lose situation. There don't seem to be many people still in the Shared Ownership Scheme and from my point of view the scheme is flawed from the perspective of the current economic climate.

The SO Scheme was advertised as a scheme to help people who had no other way to purchase a home yet there is no option to subtract the rent paid from the redemption value like the Rent to Buy Scheme and for somebody to transfer to 100% ownership in the current economic climate means taking on a massive negative equity hit and to be honest I cant see anyone actually getting a mortgage on a property in negative equity anyway.

However in our case even if we wanted to transfer to 100% or sell the property we couldnt because the council said that the deeds to the apartment are still in land registry - 4 years after we "bought" the apartment?! Could this be a possible get out route for us? or a loop hole of some sort?

I do not think we should have to continue to pay almost 500 in rent every month to the council when we are not choosing to stay in 50/50 situation. Also why should the rent remain the same when the value of the property is much less? And why has the councils equity increased every year when the actual value of the property is about 150,000 less than it was?

Any help or advice would be much appreciated!

dingoxh

Hi Duana,

I found the council quite easy to get in touch with. I am in a similar enough siuation to yourself with DCC. I phoned them up and they were pushing me into the full 100%. They sent around a valuer yesterday to get the ball rolling. They said the there would be €100 stamp duty , €650 land registrary fees and to allow up to €1000 for legal fees.

I am just curious as to whether I can dispute the value of their 40% stake in my place. any ideas there?

John Mason

in the process of transferring my shared ownership to 100% myself.

found them very easy to deal with. just need to get my solicitor on to it and get the legal fees together.

i am knocking a couple of years off term as well.

if you are having a problem getting in touch with them, you should email their customer services department.

they never sent a valuer to see my place??

dingoxh

Hi Irishbird,

Yeah, they said that sending the valuer around was the first step to tranaferring to full 100%. I am surprised they haven't sent one around

When you say you are knocking a few years off your term, do you mean you are just going to pay more each month are you negotiated on how much you owe them?

John Mason

No they just wrote to me and said this the new amount you will be paying for the 100% mortgage.

i have 19 years left but said i wanted to pay the balance back over 15 years instead and they said fine, your new amount will be xxxx

going to phone my solicitor tomorrow and get the ball rolling.