Been trying to find the answer to this via Google for an age, so thought the hive mind would be worth a try;

a client of mine wants to buy a shared ownership property. The current “owner” owns 25% of the property – this is what my client wants to buy, however the HA are stating that he has to buy 40% and nothing less.

In principle this is fine, however the mortgage lenders won’t lend enough due to affordability and he can’t raise more funds for the deposit.

So…is the HA allowed to force the purchase of a higher % than that being sold by the current owner?

Have you asked the HA why it has to be 40% and is the current “owner” under the HA as well or private?

Could just be their terms for shared ownership.

Current “owner” under the HA – purchase started at 25% but then arbitrarily increased to 40% with no reason given! Trying to get hold of anyone to speak to has proved impossible for me, the estate agent and my client…

By HA are you meaning housing association and do you mean they are asking your client to only raise 40% of market value? If so I’d say that is pretty decent, it’s usually 70% with a HA having a 30% retained stake.

Hm…that sounds like a bit of a tough restriction on the current owner, saying that they basically are not permitted to sell their stake, unless they can find someone prepared to buy another 15% more besides.

Housing asociations can make the rules as they see fit, and alos the mangement comitee may have input into the mater, ours did, when i lived in a HA flat, 40% may be because they want to attract the right type of person, that will be beneficial to the properties,Eg can afford the rent/mortgage/service charges etc.

Thanks for all the replies. Project, that’s pretty well what I thought as the HA is the majority owner…

In theory the HA supply social housing for the demands for the area they operate in. In doing so can then stipulate the % available and time further staircasing is available. Shame they see fit to up the minimum % now/for your clients.

HA are funded by the government, and need to get a pay back on their funding for housing, thus the increase in fees/charges, obviously the current tenant isnt telling the whole story, the payback will hopefully be reinvested in more afordable homes, or rented properties.