Jump to content
House Price Crash Forum
Assume The Opposite

Shared Ownership Hpc- Would Yours And The Ha's Stake Fall In Value?

Recommended Posts

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. :P

Thanks :D

Share this post


Link to post
Share on other sites

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...

Share this post


Link to post
Share on other sites

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.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   48 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.