Ana Hernández bent the rules on subletting her shared ownership home to help make ends meet. But she’d encourage other people to think carefully before embarking on shared ownership.
“My former neighbours worry about problems with shared ownership being made public. They’re concerned it will make their own flats harder to sell in the future.“
I sold my shared ownership flat earlier this year. In fact, I moved out a few years ago because I gave birth and couldn’t afford to live there while I was on maternity leave. At the time, I wasn’t ready to sell. I wasn’t sure where I wanted to live in the long-term. So I used Airbnb to let my flat for short-stay holidays. To start with, I didn’t realise how Airbnb worked. I ended up travelling long distances from where I was staying to clean my flat in between lettings. It was a horrible and very stressful period of my life. My maternity leave wasn’t exactly a break from working!
“I decided to sell after I left my job and realised the flat had become a burden“
Then some work colleagues needed somewhere to live, so I sublet the flat to them. I didn’t have permission from the housing association. I didn’t ask because I knew my request wouldn’t be approved. Shared ownership leases don’t allow subletting. But I couldn’t afford to stay in the flat and I definitely couldn’t afford to leave it empty. I was very careful how I went about subletting my home so it wouldn’t cause problems for me with the housing association.
I decided to sell after I left my job and realised the flat had become a burden. My outgoings had gone up considerably. The service charge doubled six months after I first moved in, and it was hard to obtain explanations. Over a decade or so my service charges were £25,000 more expensive than I initially anticipated (on average £2,500 extra every year). So shared ownership wasn’t ‘affordable’; it was very expensive.
To make things worse, residents in my block started to realise there were a lot of mistakes in the service charge statements. For example, we noticed we were paying for rubbish to be removed; but it was taken by the council. The housing association was charging us for a waste service they weren’t providing. We had one meeting with them, but it was a disaster. They were late, confrontational, and couldn’t answer our questions.
“I’ve read about the problems faced by other shared owners who are also parents like me“
When I bought my flat I could only afford a 25% share. But I went ahead because the location was so convenient; it was close to my workplace at that time. Six months after I purchased my first share, my circumstances changed and I could have afforded a much larger share. But you’re not allowed to staircase until you’ve lived in a shared ownership home for two years. I managed to staircase some years later, but not to 100%. House prices had gone up so much by then I couldn’t afford to staircase to 100%.
I’ve read about problems faced by other shared owners, who are also parents like me, and I feel lucky. It could have been me stuck in a one-bedroom flat with a young child and not able to sell.
My own sale was relatively straightforward. Fortunately there weren’t any fire safety problems in my block; even though the neighbouring block had cladding issues. But I’d have been better off if I’d sold my flat a couple of years earlier as flats in my block have gone down in value since 2018.
Shared ownership worked out for me in the sense that I lived somewhere nice for a number of years and I made a gain on the sale, which I used towards my deposit for my next property. Even so, I’d advise anyone considering shared ownership to be very cautious, particularly when it comes to service charges and ground rent. I wish the law would cap service charges; there are no controls.
It’s also worth thinking carefully about your life plans. Will you be able to afford to start a family if that’s what you want to do?
I’m writing about my shared ownership experience anonymously because my former neighbours worry about problems with shared ownership being made public. They’re concerned it will make their own flats harder to sell in the future.
Name changed to protect anonymity.