Shared Ownership - problems

AKK_3

Hi,

I put down a £3% deposit on a 40% share of 220K, which I think is around £2640. Putting down a deposit meant I could get a rate of 4.99% which I sourced myself and not through a broker. Brokers are helpful but they can't always get you the best deal.

Who knows where interest rates will be in 2yrs time, at which time I will have to look to get a better mortgage deal, as you don't really want to pay the higher variable rate.

I now think maybe I should have fixed the rate for longer...........I suppose it's hard to plan the future.

Bargain_Rzl

Well I went through a broker and got 4.89% fixed for 2 years (from Nationwide) - still, I had a 12% deposit on my share and I suppose the fact that I paid a broker fee on top of that probably means you actually have a better deal than I do, AKK.

Just about to start saving like fury in my new Lloyds TSB Monthly Saver so as to pay off a lump sum when the fixed rate is up, as the rate on the LTSB account beats my mortgage rate by a good margin even after tax.

AKK_3

Yep, the more you put down as a deposit the better deals you can get. I also went for a product which included the lender paying the conveyancing fees minus disembursements.

AKK_3

Yep, the more you put down as a deposit the better deals you can get. I also went for a product which included the lender paying the conveyancing fees minus disembursements.

AKK_3

Hi,

I was thinking of renting the second bedroom, as anyone done this and what's involved?

Thanks
A

izoomzoom

I am sure that the T&C of your lease agreement will probably prohibit this.

lynzpower

AKK wrote:

Hi,

I was thinking of renting the second bedroom, as anyone done this and what's involved?

Thanks
A

I did this to freinds.

Yes, it was forbidden by the lease, but they only stayed a few weeks some of em. And my partner lived with me without being on the lease.

Didnt cause any problems, but I dont know what the repercussions would have been

AKK_3

Hi,

I have now exchanged and am getting the keys next Friday!

I am excited but also realise there will be lots to sort out.

A

Richard_Webster

Have a look at: http://forums.moneysavingexpert.com/showthread.html?p=4264071&posted=1 where I attempt an explanation of some of the complications of SDLT (Stamp Duty Land Tax) on shared ownership.

As a conveyancing solciitor I believe this may be helpful and provide pointers for people but I cannot accept any responsibility to anyone other than a paying client.

Bargain_Rzl

Richard,

Quick one for you, based on your other post which I have read before.

You can either pay on the present market value - so £160,000 market value means £1,600 SDLT but £125,000 market value means NO SDLT! - or on the share purchased - with a 50% share on £160000 full value this would be £800.

Yes, you DO pay SDLT on the price if it doesn't exceed £125,000 because the exemption only applies if the rent being paid on a new lease is less than a certain figure and the rents in these cases are always over the figure!

When you say "the price" do you mean the price of the share?

I was misled by this before because I thought you mean the market value, which would contradict your previous paragraph.

Anyway, as of a couple of days ago I think I have finally sorted out a problem I have been having with my stamp duty calculation. I recently bought a 40% share of a flat with a market value of £145k which qualifies for Disadvantaged Areas Relief (i.e. making the threshold £150k) and has potential to staircase to 100% but no potential to gain the freehold. This, the Tech Newsletter suggests and my solicitor insisted, means no stamp duty is payable. I subsequently got a bill anyway, but when I queried this with the SDLT helpline I was told that my solicitor had made an obvious error on the form, and that it should indeed be zero. Solicitor has also been in touch with the SDLT office and been advised the same. Form has been amended and solicitor is now awaiting my SDLT certificate.