My SO Home: No. 22

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“No matter how hard we looked, we were never going to be able to afford to buy on the open market.”

Jane Whittaker* (shared owner)

I bought a 30% share in my flat nearly 20 years ago through Shared Horizons Housing Association. Over the decades, Shared Horizons became Amicus Horizon and then Optivo. Now Optivo have announced a merger with Southern Housing Group.

At the time, I was living in South East London with my partner and we wanted to stay in the same area. Unfortunately, no matter how hard we looked, we were never going to be able to afford to buy on the open market. I’d heard of shared ownership and went along to an information event to learn about eligibility criteria and potential costs.

We found out we were eligible to apply and, three months later, we were excited to be moving into our new home.

We knew we’d chosen the right place for us and had aspirations to purchase more until we owned the full amount. However, within a short time, it became clear that there were issues.

The sales price was too high

The sales price of the flat appeared to be over inflated. Within less than a year, I discovered you could buy the same property in the same block for over £100,000 less. I’ve raised this with other SO residents, both within my block and other SO residents not on our development, who bought around the same time and they experienced the same issues.

Problems with service charges and quality

I’ve come to realise that simple jobs such as replacing the extractors in the bathrooms (like for like) are never actually ‘simple’ as the flats were not built with quality in mind.

Although I bought a 30% share, unfortunately, I’m responsible for 100% of the costs. This applies even where the issues are not to do with ‘upkeep’ (as stated in the lease), but related to the remediation of dangerous cladding materials and other safety issues caused by poor and unsafe building of the property in the first instance.

Despite asking numerous times over the years, I could never get a full breakdown of service charges. These seem to be decided arbitrarily, with reconciliation completed years later. I had to wait years for a refund of over £1,000 that I knew was due (even though I was initially advised that I was incorrect).

For the past few years, I have been charged to replace cladding and other safety works, yet they will be paid for by the builder. Although I am aware other residents who are full owners are being given refunds, there is no movement from Optivo for SO.

I also pay ground rent and, on one occasion, I received a solicitor’s letter stating I would be taken to court for not paying my ground rent. But I had paid this to the housing association and had confirmation. I contacted Optivo, and it transpired they hadn’t paid the ground rent, but had no consideration of the impact in terms of stress and anxiety to residents receiving letters direct from solicitors.

The constant demands and increases in service charges have contributed significantly to being signed off work for stress and anxiety in the past. I still have anxiety but am on medication to help me manage it.

I’ve never managed to staircase

I still only own 30% of the property despite having attempted to staircase a couple of times. The first time I tried I realised I couldn’t buy more than an additional 5% and felt the costs wouldn’t be worth it for such a small percentage. On the second occasion, I was all set to purchase an additional 15%. Due to an error made by the bank in the initial offer, they withdrew and said they could still help but at a higher interest rate. But I couldn’t afford the higher interest so had to make the hard and upsetting decision to abort.

There were, of course, costs associated with both these attempts and I realised I’d have to pay out for the same activities each time I wanted to purchase more of the property. An ineffective and expensive way of trying to staircase for me, but a profit-making process for the housing association. Attempting to buy the second time, it felt that SO applicants are unfairly looked at by banks in terms of interest rates and considered ‘more of a risk’.

Optivo sold me a short 99-year lease

The leasehold was for 99 years and I am now close to 80 years remaining. But I’m not in a position to either staircase to 100% or extend the lease. I am aware, however, that waiting another year or so, will almost double the amount I have to pay to extend my lease. (Lease extension is much more expensive once there are fewer than 80 years remaining on the lease due to ‘marriage value’).

No-one explained the implications during the purchase process.

Nor can I sell my 30% share to another shared ownership buyer, because they would inherit the number of years remaining rather than get a new extended lease. Again, no-one explained this situation – or the implications – to me.

Even if someone bought the entire flat rather than a percentage, they would still only inherit my existing lease length. The sales price would take lease extension costs into consideration, reducing any gain I might make.

It seems there is no regulation of housing associations in regard to shared ownership leases (amongst other things) and we remain at the mercy of what I feel is an unscrupulous a housing association using lease extensions to force us into paying more unnecessarily. Furthermore, I am also aware that many other housing associations provide a 125-year lease for shared ownership. In fact, I think that Optivo/Southern Housing Group now offer 125 years to shared owners on other developments. Yet there has been no attempt at parity or mitigating disadvantage for those sold a short 99-year lease.

I spend almost all my income on my housing costs

Currently I pay Optivo/Southern Housing Group nearly £1,200 per month in rent and service charge. Add my mortgage and normal bills on top of that and I have approximately £150 left for food, petrol, etc. How the government or housing association expect me to be able to save and purchase more is beyond me!

It makes me angry when I see adverts and publicity promoting SO, yet the Government and housing associations continue to promote shared ownership as affordable, and as a way to get on the property ladder. Whereas I am stuck exactly where I was almost 20 years ago just after purchasing. In fact, I’m in a worse situation due to disproportionate increases in service charges.

It makes me sad and frustrated to know that I bought with such excitement and aspirations and yet I still only own 30% of the property and am never likely to be in a position whereby I can purchase more shares, let alone staircase up to 100%.

What does the future hold?

Despite all the problems with shared ownership, I’ve made many friends within both my block and the area. I live in a great little community and am lucky (unlike others) in that I do not currently want to move.

However, I do need to think of my future or have a consideration for if something was to happen to me. (I certainly don’t want to saddle any of my family with a burden).

I also need to consider what would happen if my flat was to depreciate in value as it did back when I first bought.

My current aspiration is to be able to afford to live in my home and not constantly worry about:

• how I am going to pay my bills and other everyday essential expenses
• how I am going to extend my lease
• whether I will ever be in a position to afford to staircase to 100%, or
• whether I could even end up bankrupt and losing my home along with everything else

Moreover, I would like to reduce and even stop taking medication for anxiety caused by the above worries.

• Not her real name.

Featured image: pvproductions on Freepik