Q We are currently in the process of selling our 40% share in a shared ownership property.
The rules of the housing association are that we have to sell for the price a Rics surveyor sets.
We had our valuation done last week by a local, recommended chartered surveyor and it came in at about £50,000 less than what we were expecting. Now I know everyone thinks their house is worth more than it is, but we were actually being quite conservative in our estimates even though a comparable property in our development recently sold for £85,000 more than our valuation. I rang the surveyor and argued my case, he then re-sent his report and overnight the valuation had increased by £15,000. However, this is still significantly less than we had hoped. Is there anything that we can reasonably do regarding this or do we just accept it get moving? The housing association has one week left to find a buyer for our share then we can put it on the open market. The housing association rules state we cannot sell for more without the surveyor’s agreement, so shall we risk putting on the market for more, in the hope he might agree?
It’s seems mad to sell so low and we don’t understand why the housing association wouldn’t want to achieve as much profit as possible.
A You are right that if your property is sold on a shared ownership basis – so the buyer buys your share of the property with the housing association retaining the remaining share – you can only sell it at the value set by the Rics surveyor. The price you sell for can’t be higher or lower. The buyer must also meet the set eligibility criteria for the shared ownership scheme. So, when selling your share in property, the fact that housing providers typically get eight weeks (sometimes 12) to find a buyer works in your favour since – unlike an estate agent – they will have sometimes thousands of potential – and eligible – shared-ownership buyers on their books waiting for a suitable property to come up. So the likelihood of the housing provider finding you a buyer is pretty high. In the case of Peabody – which is one of the largest housing providers in London and the south-east – it reports finding a buyer within the eight-week period in 98.8% of cases. Another advantage of using your housing provider is that its fees are likely to be less expensive than those charged by an estate agent.
You don’t have to use your housing provider to find a buyer if you own 100% of your property and so can instead sell it on the open market. It also means that the buyer doesn’t have to pass the shared-ownership eligibility test. But you also have the option to sell 100% of your property even if you currently own only a share of it. According to national shared-ownership property portal Share to Buy, if your housing provider hasn’t found you a buyer in the time allowed, you can sell the whole property using a process known as “back-to-back” or “simultaneous” staircasing. This involves increasing your share to 100% on the same day as the sale goes though. You don’t have to borrow extra to pay for your extra share because the funds from the buyer do that (which is why it has to happen on the same day). The bonus in your case is that you would be allowed to accept offers of more – but not less – than your valuation amount.