P
pennyw
Guest
Hi everyone. My boyfriend bought a house on the shared ownership (SO) scheme before we met in 2007, and now we're looking to get engaged and settle down together, so we're looking to sell his SO property (I also have a house I am trying to sell separately; the plan is to buy something together ideally).
I am a little confused on what the redemption value on his SO house should be, especially re: the rented equity 50% portion. I think that some posters have noted that the Council will want the full-whack original valuation for their portion, despite the tumbling house prices in the last few years (the house is definately no longer worth what he paid for it, and is in negative equity as a result).
However, poking around has led me to section 10 of the Housing (Miscellaneous Provisions) Act 2002, which seems to state that the "current market value" has to be considered in any selling or purchasing the rented equity situation.
Subsection 3(a)(i) states that where a purchaser "sells his or her interest in the house...before the expiration of 20 years from the date of the shared ownership lease, the purchaser shall pay to the housing authority an amount equal to a percentage of the current market value". Furthermore, subsection 3(d)(i) states "Where the amount payable under paragraph (a) would increase the purchase price above the current market value of the house, the amount payable shall be reduced to the extent necessary to avoid that result." Payments already made (mortgage payments and rent?) and material improvements to the property (fixtures and fittings?) also have to be credited from what I can see.
Am I interpreting this section of the 2002 Act correctly? (note that the 2009 version of the Act does not repeal section 10 for exisitng SO leases, so this section applies in his case with a 2007 SO lease). If I am interpreting this correctly, then on what statutory basis exactly could the Council not accept 50% of the current market value for their 50% portion? (the mortgage for his 50% being a different matter, I would expect) Am I missing something?
I would appreciate any advice or input. Oh, what I'd give for a simple life
Penny
I am a little confused on what the redemption value on his SO house should be, especially re: the rented equity 50% portion. I think that some posters have noted that the Council will want the full-whack original valuation for their portion, despite the tumbling house prices in the last few years (the house is definately no longer worth what he paid for it, and is in negative equity as a result).
However, poking around has led me to section 10 of the Housing (Miscellaneous Provisions) Act 2002, which seems to state that the "current market value" has to be considered in any selling or purchasing the rented equity situation.
Subsection 3(a)(i) states that where a purchaser "sells his or her interest in the house...before the expiration of 20 years from the date of the shared ownership lease, the purchaser shall pay to the housing authority an amount equal to a percentage of the current market value". Furthermore, subsection 3(d)(i) states "Where the amount payable under paragraph (a) would increase the purchase price above the current market value of the house, the amount payable shall be reduced to the extent necessary to avoid that result." Payments already made (mortgage payments and rent?) and material improvements to the property (fixtures and fittings?) also have to be credited from what I can see.
Am I interpreting this section of the 2002 Act correctly? (note that the 2009 version of the Act does not repeal section 10 for exisitng SO leases, so this section applies in his case with a 2007 SO lease). If I am interpreting this correctly, then on what statutory basis exactly could the Council not accept 50% of the current market value for their 50% portion? (the mortgage for his 50% being a different matter, I would expect) Am I missing something?
I would appreciate any advice or input. Oh, what I'd give for a simple life
Penny