Joint ownership - if I'm brought out how much will I get

[rosiepips]

Hi, I co-own a property which I brought when the market was at its peak. It was worth 150K when I brought it and I put a 12K deposit down to own 50% of the property. I want to sell my half of teh house - the co-owner is happy to buy me out - and ceratin people have told me that I will only get a few thousand punds due to negative equity. I don't quite understand this. I was under the impression that I owned approx 8.5% (12K is approximately 8.5% of 150K) of the house with the deposit that I put down. Surely I still own 8.5 % of the house? Does that mean if I try to sell my half and its now only worth 100K I'd get £8500, or if its now worth 130K, which is more likely, I'd get around £10,500? I thought this was the case but I'm now confused that I may be wrong. Can anyone advise me please?

[IFA]

So am I correct in thinking that you bought jointly with another person and you both put in £12k deposit and raised the rest on mortgage?

If so, your original mortgage was £126k, and as you bought at the peak of the market I'm guessing you have only been making repayments for a couple of years so there's not much paid back yet?

On this assumption, if the property is now worth £130k then you are not in a neqative equity situation since the house is still worth more than the amount of outstanding mortgage, but to my way of thinking your rightful share of the property is 50% of the equity, not 8.5% of the value.

Think of it this way - if your joint mortgage is still £126k, and the property is worth £130k then if you sold the property you would have £4k to split between you after the mortgage was paid off (ignoring expenses). Therefore each joint owner has at this point lost £10k each.

If you wanted to sell your share of the property to your co-owner then it should only cost them £2k as that is the amount of value that they are gaining and you are selling.

You're right that originally you owned 8.5% of the property, but the house has reduced in value by £20k and the debt owed against it has not, so unfortuntely you have lost money on this investment at this stage, as has your co-owner.