Can You Negotiate Price on Shared Ownership?

Using the shared home ownership approach is one of the best ways you can gain ownership of property when you don’t have the resources to make a direct purchase. Given how the process works, however, it’s easy to wonder: can you negotiate price on shared ownership?

You can’t negotiate price on shared ownership as a result of how valuations are made. When you start the process of purchasing a share of the property, the lender makes a valuation that lasts 3 months. Unfortunately, the asking price won’t shift from what value the valuation suggests.

In this article, I’ll explain how you can negotiate the asking price for shared housing ownership in the UK. I’ll also be exploring everything you need to know about the shared housing ownership system and explain some obstacles you’ll need to avoid throughout the process.

House Negotiation

How To Negotiate Asking Price on Shared Housing Ownership in the UK

Unfortunately, there is no way to negotiate the asking price for a shared ownership home. The lender may need to request a new valuation if the valuation expires. Valuations last for at least 3 months, so steep declines in market value can sometimes cause difficult situations.

In theory, plenty of scenarios would make negotiating the asking price on shared housing ownership useful. For example, suppose a shared housing ownership purchase took place during a significant downturn in the housing market. In that case, the home’s value could decline significantly after the valuation was made.

In such a case, negotiating the asking price for the shared housing ownership purchase would become an essential part of getting a good deal. Unfortunately, it also isn’t possible to negotiate. Housing associations have significant control over the process and will only offer a better deal than the asking price if a new and lower valuation is made.

The valuations created by independent surveyors last for 3 months and can be extended for an additional 3 months. Once the valuation’s term expires, a new valuation is needed before the purchase can be made. You may find that the valuation decreases if the housing market has taken a significant downturn. 

Unfortunately, the long valuation term length means that it’s unlikely that you’ll be able to purchase a share in the home for a lower asking price. If you want to wait for a new valuation, you will need to rescind your offer and wait for a new valuation to be ordered. You will then need to make another mortgage offer. 

This strategy may lead to someone else purchasing the home at the asking price before you have the opportunity to do so. You should thoroughly weigh out the possibility of losing your desired home before rescinding your offer to purchase it. 

What To Consider Before Accepting the Asking Price for a Shared Ownership Property

Shared ownership is a great way to get a stake in property ownership and improve your security when you would not have been able to otherwise. Before deciding whether to purchase a stake in a shared ownership home, it’s important to consider the following:

Investigate Whether the Asking Price Is Fair

Before deciding to accept the asking price you were given for a shared ownership home, you should investigate if it’s actually worth the cost — and determine if you think the home will depreciate or increase in value. 

To start, you should use the Land Registry or RightMove to look at similar homes. You can find similar properties and assess whether they were sold at a similar price. This will allow you to see if your home is listed for a fair price, and how the prices of homes have changed over time in your area.

You should make sure to factor in all qualities of the homes you’re looking at as you compare them. How many bedrooms, for example? And what is the square footage? Beyond that, you should also make sure that you’re factoring in the condition of the homes.

Consider Purchasing a Smaller Share of the Property

Generally speaking, the minimum share of a shared ownership property that you can purchase is 25%. The maximum you can purchase is 75%. Depending on the terms of the housing association you’re purchasing from, this may vary.

There are a lot of reasons that purchasing a larger share of a property is appealing. Since you’ll have a higher stake in property ownership, expenses like rent will be reduced. Unfortunately, purchasing a larger share of a property isn’t always affordable.

If you find that the current asking price is too high, you should consider purchasing a smaller stake in the property and increasing your ownership with gradual investments over time. This will make purchasing the property significantly more affordable. 

Factor in the Other Expenses Before Purchasing

While being able to own a stake in your very own property is an appealing idea, there are a lot of unexpected difficulties that come with the process that can quickly make the experience miserable. You should consider all of the possibilities before purchasing a stake in a shared ownership property.

  • Consider that rent may increase. While the rent starts low, it will continue to rise if property values increase in the area. Unfortunately, this can quickly make a stake in a shared ownership home unaffordable to keep — but you’ll be trapped by the terms of the purchase unless you’re able to sell your share.
  • Remain aware that the property can still be repossessed. In some cases, homeowners who have fallen behind on rent despite owning a share of the property have had their homes repossessed. Unfortunately, these homeowners were not entitled to get their share in the property back.
  • Consider whether you’re purchasing a new build property. Purchasing a brand-new property is inadvisable unless you plan to live there for a very long time. Moving into the property will cause an immediate deprecation in value. This will only be offset by increases in housing costs over time.
  • Determine if you will be able to afford maintenance fees on top of your mortgage and rent payments. Even though you’ll only own a share of the property, you are responsible for all of the maintenance costs. You should determine whether this is sustainable on your budget before purchasing. 
  • Factor in all other purchase expenses. If you’re purchasing a stake in a shared ownership home, you should expect to pay solicitor fees, stamp duty costs, mortgage broker fees, and any other moving costs. You may also need to pay housing association fees, home building insurance, and home contents insurance. 

Should I Purchase a Shared Ownership Home?

Ultimately, you should carefully consider your circumstances before deciding whether to purchase a stake in a shared ownership home. It requires significantly more dedication than renting a home, and you’ll be taking on a lot of risks when you purchase your share.

If you are ready to rise to the challenge and know that you’ll be able to keep up with the costs of purchasing a share, however, it can be a great thing to do. Shared ownership is an excellent way to get a stake in property ownership and improve your stability when you wouldn’t have had the opportunity to do so otherwise.

Consider your decision carefully before purchasing a stake in a shared ownership home. If you decide to purchase a share of the home, it won’t be long before you understand just how wonderful home ownership is. And with time, you may find that you grow incredible equity on your new property.

Final Thoughts

When you consider the cost of purchasing a share of a shared ownership home, it’s easy to wonder whether you can negotiate the asking price. It’s also recommended to use the right strategies for investing in your new property.

Unfortunately, there aren’t any avenues to negotiate the cost of a property. It’s important to wait for the right time to buy your home if you want to ensure that property values only increase in the future. As long as you’re careful, it won’t be long before you’re enjoying your new home. 



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