Assume The Opposite Posted March 27, 2015 Share Posted March 27, 2015 Hi everyone, What would happen in a HPC if you had a 25% share: Would your 25% share and the Housing Association 75% share be worth less? Would the HA go bust? I'm just thinking that if you got a 25% share and the HPC comes, the other 75% would be worth much less. So you might end up not being in negative equity, and the share you don't own suddenly becomes much cheaper to staircase. This would be a house to live in, not to buy. I don't have any plans, just wondering. Thanks Quote Link to comment Share on other sites More sharing options...
tyres Posted March 27, 2015 Share Posted March 27, 2015 I think, you'll get shafted even if house prices fall, your share of the rent isn't going to fall. Also, you'll be in negative equity, and still have to pay your mortgage share. If you want to buy / staircase, the HA determine the value of your home, so I doubt you'll get a fair valuation thats in your benefit. Also depends on the HA, whether you are able to buy the 75% in one go, or even if you are able to buy 100% of your home. I think you will need to staircase several times, each time paying fees for the HA to value your home... Quote Link to comment Share on other sites More sharing options...
renting til I die Posted March 27, 2015 Share Posted March 27, 2015 I think shared ownership is the worst of both worlds. The HA hold all the cards and can change/make up the rule as they wish! I suppose it might always come up as a new mis-selling scandal! Quote Link to comment Share on other sites More sharing options...
Will! Posted March 28, 2015 Share Posted March 28, 2015 What would happen in a HPC if you had a 25% share: Would your 25% share and the Housing Association 75% share be worth less? Yes. Would the HA go bust? Not necessarily. I'm just thinking that if you got a 25% share and the HPC comes, the other 75% would be worth much less. So you might end up not being in negative equity, The price of your share and the price of the HA's share would fall by the same percentage. The size of your mortgage and your rent would not fall. Shared equity offers no protection against negative equity. and the share you don't own suddenly becomes much cheaper to staircase. If HPC happens then the HA's share would indeed be cheaper to staircase, although you might not be able to afford it if the fall in price of your own share has put you in negative equity. This would be a house to live in, not to buy. I think that's the level of clarity of thought most shared equity schemes rely upon. If you are thinking about shared equity then here are six questions you should ask the HA: 1. Is it possible to buy 100% of the equity in a flat at the start? If not, why not? 2. Are there any restrictions placed on who can provide the mortgage? 3. What are the arrangements for valuing the flat when staircasing? 4. What are the arrangements for rent review? Is there an independent arbiter and/or a formal appeal process? 5. What are the consequences of falling behind on the rent and/or serivce charge? 6. What restrictions are placed on selling the flat, regardless of how much equity is owned? If you can't get acceptable answers then walk away. Quote Link to comment Share on other sites More sharing options...
Assume The Opposite Posted March 31, 2015 Author Share Posted March 31, 2015 Good answers, thank you Quote Link to comment Share on other sites More sharing options...
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