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    • Gingercat6
    • By Gingercat6 11th Mar 17, 6:30 PM
    • 5Posts
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    Gingercat6
    Shared ownership and staircasing to 100%
    • #1
    • 11th Mar 17, 6:30 PM
    Shared ownership and staircasing to 100% 11th Mar 17 at 6:30 PM
    Hi all new to this forum but have some questions regarding shared ownership and staircasing to full ownership.

    There will be some new houses being built in a small development near where we currently live. We would like to buy a shared ownership property and eventually (after 4/5 years) staircase to full ownership. I have been told this is possible and the freehold can be transferred over.

    Partner will be earning 45k plus and as he becomes more qualified this will increase. I earn much less.

    I wondered if anyone else has staircased to full ownership? Do you have to save up another deposit to do this? If any could please explain the process of remortgaging with shared ownership/ borrowing more that would be very much appreciated.

    Please no negative stories, this seems to be a really good way of getting on property ladder for us and the development is in a lovely rural village.

    Many thanks in advance!
Page 1
    • sparky130a
    • By sparky130a 11th Mar 17, 6:38 PM
    • 437 Posts
    • 585 Thanks
    sparky130a
    • #2
    • 11th Mar 17, 6:38 PM
    • #2
    • 11th Mar 17, 6:38 PM

    I wondered if anyone else has staircased to full ownership? Do you have to save up another deposit to do this? If any could please explain the process of remortgaging with shared ownership/ borrowing more that would be very much appreciated.

    Please no negative stories, this seems to be a really good way of getting on property ladder for us and the development is in a lovely rural village.
    Originally posted by Gingercat6
    I'm confused. Do you want peoples true experience or something tinted with rose glasses?
    • Gingercat6
    • By Gingercat6 11th Mar 17, 6:58 PM
    • 5 Posts
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    Gingercat6
    • #3
    • 11th Mar 17, 6:58 PM
    • #3
    • 11th Mar 17, 6:58 PM
    Id be interested to see if anyone has been through shared ownership and what their experiences are.
    • AFF8879
    • By AFF8879 11th Mar 17, 7:10 PM
    • 333 Posts
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    AFF8879
    • #4
    • 11th Mar 17, 7:10 PM
    • #4
    • 11th Mar 17, 7:10 PM
    I would be prepared for mostly negative stories, which seem to be the theme here when shared ownership is discussed. I personally would agree given the limitations / complications which I won't go in to, per your request! Though you should make sure you do read up on the risks, for your own benefit.

    Whereabouts are you looking to buy? 45k plus a second income is a fairly healthy budget, have you considered purchasing a smaller place outright?

    I've also heard stories of surveyors (provided by the housing association) placing prohibitively high values when the shared owner is trying to staircase, and low ones when trying to remortgage. I recall one person on here using their remortgage valuation to attempt to staircase, not sure what the reaction would have been...

    Also some housing associations do not allow staircasing to 100%, as a way of keeping stock under council control, so be sure to confirm that first if you wish to proceed.
    • Gingercat6
    • By Gingercat6 11th Mar 17, 7:40 PM
    • 5 Posts
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    Gingercat6
    • #5
    • 11th Mar 17, 7:40 PM
    • #5
    • 11th Mar 17, 7:40 PM
    Thank you for your response

    Looking to buy in north Bedfordshire.

    Yes buying outright is a possibility but it would enable us to buy a larger house and buy more shares when we can.

    I do understand that it probably isn't for everyone but I think it's a good way for getting on the ladder
    • booksurr
    • By booksurr 11th Mar 17, 8:01 PM
    • 3,615 Posts
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    booksurr
    • #6
    • 11th Mar 17, 8:01 PM
    • #6
    • 11th Mar 17, 8:01 PM
    Id be interested to see if anyone has been through shared ownership and what their experiences are.
    Originally posted by Gingercat6
    I do understand that it probably isn't for everyone but I think it's a good way for getting on the ladder
    Originally posted by Gingercat6
    since you appear to have made up your mind to do this anyway, why not use the search function to find "experiences" or can you not bear the thought of having to read "negatives"?

    there are already 244 threads recounting shared ownership experiences...
    • Gingercat6
    • By Gingercat6 11th Mar 17, 8:17 PM
    • 5 Posts
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    Gingercat6
    • #7
    • 11th Mar 17, 8:17 PM
    • #7
    • 11th Mar 17, 8:17 PM
    I haven't made up my mind about anything, it's not set in stone I just wanted to hear about the staircasing process.
    • neilio
    • By neilio 11th Mar 17, 10:08 PM
    • 182 Posts
    • 89 Thanks
    neilio
    • #8
    • 11th Mar 17, 10:08 PM
    • #8
    • 11th Mar 17, 10:08 PM
    When you decide to staircase, you need to get a property valuation from a RICS chartered surveyor. Either the housing association will appoint one or you need to commission it yourself, it depends what the housing association tells you to do. When you have the valuation report, present it to the HA, they should accept the valuation and you can commence staircasing.

    Hopefully the property would've gone up in value. If you originally bought 40% of the property, then 40% of the equity is yours. For example, if the house was originally worth £200,000 and you bought 40% for £80,000, and the value of the property has increased from £200,000 to £250,000, then 40% of that increased value of £50,000 is your equity share. In this example, it would be £20,000. The other £30,000 equity share is the HA's.

    Yes, you do need funds to finance a new mortgage when you staircase. You would use your equity share from the increase in value to finance this. In practice, you remortgage to release your equity whilst simultaneously using that released equity to obtain a bigger mortgage on the property for the amount you are staircasing to. Any capable mortgage broker or advisor will be able to help arrange this. I would always recommend going to a broker rather than walking into a bank branch off the street.

    Then you go through the legal process, your lawyers speak to the HA's lawyers in much the same way as the conveyancing process for buying a property. I've never heard of HAs not allowing 100% staircasing; the whole point of the scheme is to encourage shared owners to eventually staircase to 100%.

    From experience, as I staircased to 100% and then sold my flat a few years later, is that there can be some shared ownership legacy clauses in leases and titles with land registry that don't get removed when you staircase to 100%, basically showing that the property is still officially shared ownership despite being 100% owned by you and 0% owned by the HA with the HA's pre-emption clauses remaining. I cannot stress this importantly enough: When you staircase to 100%, make sure your solicitor has any pre-emption clauses and restrictions and anything else regarding shared ownership removed during conveyancing - this will make it much easier for you to sell in years to come.
    • Gingercat6
    • By Gingercat6 12th Mar 17, 9:32 AM
    • 5 Posts
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    Gingercat6
    • #9
    • 12th Mar 17, 9:32 AM
    • #9
    • 12th Mar 17, 9:32 AM
    Thank you very much neilo!

    That's really useful information.
    I have spoken to one of the property developers who said that freehold of the property is transferred upon full ownership. Thanks again!
    • kingstreet
    • By kingstreet 12th Mar 17, 9:51 AM
    • 30,917 Posts
    • 16,471 Thanks
    kingstreet
    Typically, you'll need to have 10% or more of the equity in the finished value, so yes you may need to inject cash if your equity in your share isn't sufficient before you begin the process.

    Ask your solicitor about making a market value election for SDLT before you buy if you are 100% sure of doing this.

    There are very few lenders offering shared ownership mortgages on newbuilds at 85% or more. If you have a small deposit, you will have limited options.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • Hoploz
    • By Hoploz 12th Mar 17, 10:22 AM
    • 3,415 Posts
    • 2,985 Thanks
    Hoploz
    I started off in shared ownership and staircased to 100% and have no negative experience to report. However that was a very different scheme whereby I bought a standard flat with the 30% HA help - hence there were none of the problems these days with stigma on estates leading to difficulty selling on later, reducing the actual market value.

    Despite it working for me the circumstances are different these days and my advice is to buy a smaller property yourself if it is at all possible - you say it would be. Please explore this option. You have a good income so go and see an independent broker, and you might find you can borrow more than you think.

    If you think you'd be more comfortable with a smaller mortgage, remember you will need to pay rent on the HA share. You will more than likely find a max-out mortgage could cost the same or in fact less per month.

    Then you can move up the ladder in a couple of years as your income increases.
    • brit1234
    • By brit1234 12th Mar 17, 3:07 PM
    • 5,136 Posts
    • 11,922 Thanks
    brit1234
    Id be interested to see if anyone has been through shared ownership and what their experiences are.
    Originally posted by Gingercat6
    Main thread on peoples experiences both good and bad:

    http://forums.moneysavingexpert.com/showthread.php?t=3177256

    Shared ownership lacks the many benefits ownership and you are responsible for 100% of the extra costs even though you own a fraction of the property. There are tons of extra costs and restrictions with the service charges and rents going up by the higher RPI rather than CPI.

    REad and understand all the small print before you jump in.
    Scams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.

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