My SO Home: No. 11

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Only the very financially savvy would understand what they were getting into, not your average 20-something, says long-term shared owner Kirsty Walsh

“For all intents and purposes housing associations seem pretty unregulated,. As a shared owner you are in a very powerless position.”

The luxury living the glossy Moat Homes sales brochure portrayed was a reality… for a few years

I entered into shared ownership in 2005 with a flat from Moat Homes in South East London. I enjoyed having an otherwise un-affordable new flat with reasonable service charge and rent. Apart from a few boiler issues, I had nothing really to worry about – as you would expect with a new flat. I was now paying into a mortgage rather than rent to benefit someone else. Initially I felt more secure. Things were great. The luxury living the glossy sales brochure portrayed was a reality… for a few years.

Alarm bells started ringing

The first alarm bells started ringing after 5 years when my service charges started to climb significantly, increasing 36% in 2 years. I contacted Moat Homes to get an itemization since this was not provided automatically. This was really my first interaction with Moat Homes. It was a mammoth effort, requiring a lot of persistence but eventually I managed to get a more detailed breakdown for my property.

Around this time I was between jobs and concerned about paying the rent and the escalating service charge. The response was brisk and it was clear there would be no consideration of circumstances or willingness to be flexible.

“I shouldn’t have ignored my gut instinct, but I thought a Government Affordable Homes Ownership scheme would be a safe proposition”.

Looking back there were signs from the start I shouldn’t have ignored:

  • the requirement to use a solicitor from an approved list;
  • some questions asked and the breezy dismissals;
    • on lease length – “It’s 125 years, no one lives this long, it’s not an issue”;
    • the evocation of the not entirely reputable ‘time share’ market;
  • the brisk, unfriendly handover of keys (not sure why this has stuck in my mind); and
  • the nagging feeling that it was too good to be true.

But I thought, it’s a Government Affordable Home scheme. It must be a safe proposition, the leases must be standardised or verified. They are a housing association, a semi-public company, they must be fair and honest. I felt reassured by all of this and the glossy brochure quickly lured me back in.

There was nowhere to get independent financial advice

With hindsight I shouldn’t accepted what I was told… But where would I have gone to get independent advice? There was nowhere. Only the very financially savvy would understand fully what they were getting into, not the average 20-something.

Moat Homes service charge and rent increases 2005-06 to 2021-22

Staircasing was never really on the cards. The property value went up so quickly as did the service charge; I would have had to be earning a significant amount more than I was to afford staircasing. And I didn’t really grasp the implication of annual rent increases of RPI + up to 2% buried in the 3rd schedule of the contract. I don’t think it ever occurred to me that rent increases could be an onerous clause so I never queried it. But most years my rent went up by 4% and one year it increased by over 6%.

Moat Homes and the building safety crisis

Ten years on my gut instinct was telling me to get out. But after dealing with the housing association a few times I knew that any interaction with them – staircase, move, extend my lease, etc – was going to be difficult and cost a lot of money. So inertia built up and stopped me taking action when I should have done.

Moat Homes hoarding

Now I’m knee deep in the building safety scandal with building defects discovered 3 years ago, a waking watch still in place and work yet to start. The negative consequences of shared ownership come thicker and faster.

Any communications are usually polite enough but their main aim seems to be to wear you down

Numerous building defects mean I have needed to communicate with the housing association significantly more often. Any communications are usually polite enough. But they are also dismissive, evasive, unyielding, often unreasonable and error prone. They rarely respond unless they know you are likely to kick up a fuss. When they do respond they will often ignore the actual reason for the communication. Their main aim seems to be to wear you down.

The sales brochure stated that one of their responsibilities was: ‘To maintain the structure and exterior of the building’. Yet Moat Homes have made it clear it is their position that costs relating to building and fire safety defects are our full legal responsibility. They have contributed nothing.

Moat Homes brochure - responsibilities under the lease

We pay more in service charges than private leaseholders on the same development as we have to pay Moat Homes 5% even though they do not manage anything on the development. We are now paying 5% to Moat Homes on the waking watch, insurance increases, building surveys, fire doors and fire alarms.

For all intents and purposes housing associations seem pretty unregulated. As a shared owner you are in a very powerless position, and for some of us now it’s dangerous too.

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