Sub-letting shared ownership

A couple of years ago I bought a shared-ownership flat as a first time buyer. One of the clauses in the lease for the rented share is that I cannot sub-let the flat.

Since then I have got married and my wife needs to live close to her elderly mother. This means that we are buying a house out of the city.

The flat poses the only problem. It is potentially in negative equity (new build flat bought 2 years ago) and so I don’t want/cannot afford to sell it. I may not even be able to sell it and so am thinking about renting it out for a year or two until the market recovers a little.

The lease says that I am not allowed to rent it out but does not say what the likely consequences of renting it out are.

My question is: if I were to rent it out and it was discovered, what can the Housing Association actually do?

Sue me? Kindly ask me to stop renting it?

I don’t really want to rent it (I’d rather just sell to save myself the hassle) but feel that my hands are tied at the moment.

The flat is in the UK.

Is there a clawback? Maybe they can force you to pay it back?

Go to the Housing Association and ask for a waiver allowing you to rent out the flat. If they say no, tell them that you will then have to let it sit empty, boarded up, a deteriorating eyesore that will bring down property values for all the other flats.

I’m not sure what you mean. That they would expect me to pay back the rent I received? But who would I pay it to? If I paid it to the association then they would be getting twice the rent for the flat and if I paid it to the renter then they’d be living for free. Neither seems fair.

I’m going to ask for a waiver but after speaking to someone else who had the same problem there is little to no chance of me getting it.

I don’t know how it works in Britain but here in Ireland shared ownership schemes involve a clawback, so that if you sell the property within a certain number of years you have to pay a certain percentage of the sale price you receive to the local authority (we don’t have Housing Associations as such). The purpose of this rule is to prevent people using the shared ownership scheme merely to get a lower price on a property you plan to then turn around and sell at a profit.

The clawback may also kick in in other circumstances, including if you rent out the property.

But I have no idea if works that way where you are.

Ah. That may well be the case here too. I’m not planning to sell it for a year or two though. If I sell it and don’t make a loss I won’t be worried if they claw back a percentage of the profit. My concern is making a loss when selling it or not being able to sell it at all in the current climate. Or not being allowed to rent it and so having to pay two mortgages.

I’ll just give this one bump in case anyone can help.

i am in EXACTLY the same position (apart from the marriage part). I too purchased a shared ownership flat 2.5 yrs ago. Whilst it was a good move at the time (i was living alone, small earnings and didnt mind the journey to work; now it is not ideal).

I really need to move in order for both myself and my girlfriend to be closer to work, and for us to have a bit more room. (potential nursery etc)

having just had my flat valued there is no way i can afford to sell at the moment, i would make a considerable loss. I have emailed the housing association involved to ask them what my options are, as usual i have had no response from them. Letting out the flat (at a small loss i might add) seems to be my only option, but i would love to know the potential problems with this!

As long as they get paid each month and i dont make money out of the situation will they really care!?

would love to know where i stand…