MTV_Tenant Profile picture
15 Sep, 12 tweets, 4 min read
1 It’s Shared Ownership Week. I’d like to share some facts about #sharedownership that are never made clear to buyers at the point of sale. Spoiler alert: you don’t have a foot on the ladder #thread #SOWeek2020 @ThangamMP @timfarron @Labour4Housing @RobertJenrick @ChrisPincher
2 Shared Ownership is NOT ownership. All you have is an assured tenancy for the duration of the lease. If you get into 8 weeks rent or service charge arrears the HA will repossess the entire property. You can lose everything. See Richardson v Midland Heart 2007
3. Nor is it shared. You are responsible for 100% of the maintenance of your property, regardless of the share that you own, and if it’s a flat, you and your neighbours will pay a service charge for 100% of the maintenance of the building.
4 Then there's the problem of Service Charge. SC is mandated by the lease, but the level of service is not. You will not be given a service level agreement. This means that you will have to pay service charge but the service you get in return is between variable and non-existent
5 Service charge is unregulated. Housing Assocs are notoriously lax about repairs & maintenance. Complaints systems are designed to be dysfunctional. If you take legal action the HA can add their legal costs to your service charge going forward.
6 And then there's staircasing. Every time you staircase you have to go through the same process as when you bought your first share. You must pay your own legal fees, and those of the housing association too. Unless you staircase to 100% you still just have an assured tenancy.
7 Although staircasing to 100% is presented as a viable outcome during the sales process, in reality only around 5% of shared ownership tenants ever attain that. Staircasing to 100% is highly unusual.
8 Then there's lease extension to consider. SO flats usually come with a short lease, 99 years. Once a lease gets below 80 years lenders will not give a mortgage on it. So, if you want to retain the value of your shared ownership investment, you need to extend the lease.
9 Shared Ownership lease extensions are not subject to law in the same way that private residential leases are. The HA decides lease extension on a case by case basis & tenant must rely on their goodwill in terms of the clauses they include. HAs are not known for their goodwill
10 You must pay their legal fees and yours. Their legal fees are determined by the length of the remaining lease - the shorter it gets, the higher the cost. The legal term is "marriage value" and it can be up to £20k or more once your lease gets close to 80 years.
11 And finally there's housing associations themselves. There are some good ones but not many. Before you buy a shared ownership tenancy, try putting the name of the housing association that will be your landlord +review into google and see what comes up.
12 Don’t believe me? Check out this BBC investigation into shared ownership and this 3-page Sunday Times article (behind a paywall, sadly)…

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