Shared Ownership is Not Ownership.
I thought that shared ownership was a legitimate way for me get on the property ladder, like the advertising said. It was introduced by the government in the late 1970s, and is run by housing associations, which are charities, and which I thought would be trustworthy. I thought, because I paid Stamp Duty on my share, that I owned my share. I thought, because the conveyancing solicitor, who explained the lease to me when she acted for me during the buying process, used the terms “buying” “purchasing” and “owning” that that was what I was doing. It didn’t occur to me at the time that using the solicitor recommended by the housing association might be a conflict of interest. I never realised that I was being lied to by everyone involved about what I was buying.
It was only much later – twelve years later, in fact – that I found out the truth. Shared Ownership is nothing of the sort. You own nothing.
When you buy a shared ownership property, you are buying an assured tenancy, under the terms of the Housing Act 1988. If you get into rent arrears on the share you don’t own, your landlord, a housing association, can repossess the whole property without returning the money you paid to them for your “share.” This is the precedent set by Richardson v Midland Heart 2007, when Ms Richardson lost everything because she got into rent arrears on the share she didn’t own, and since then a number of people have lost their homes in similar circumstances. This situation will only change if there is a new Act of Parliament which updates the 1988 Act. Currently there are no plans to do this.
On top of this, you are responsible for 100% of the maintenance of your property, and, if it’s a flat, the rest of the building too. There is no regulation of service charge, and no service standards, so you end up paying a fortune for very little. And if you get very annoyed and go to tribunal over something, you have to pay for yourself, the defendants legal costs can be added to future service charges, and whatever the tribunal decides, there is no mechanism by which their decision can be enforced anyway. If you want to sell, you have to go through the housing association, and use their valuation, and pay a fee based on 100% of the property value, not on the share you “own.”
It’s also worth bearing in mind that Housing Associations have been deregulated, and have a not-undeserved reputation for being profiteering bullies who behave appallingly towards their tenants for no other reason than they can. The Regulator of Social Housing is woefully toothless, the Housing Ombudsman is similarly underpowered, and there is no current political will to fix this state of affairs.
If I had known what I know now back in 2006 when I bought my shared ownership flat, I wouldn’t have touched it with a bargepole. Caveat Emptor, as they say. Buyer Beware.