Staircasing / shared ownership

Jo*_2

I currently own a 50% share of a one bedroom flat and want to stair case to 100% before selling up and buying somewhere bigger.

I spoke to my mortgage company, Kent Reliance, and was told that in order to buy the rest I would need a 25% deposit. Is this correct? It sounds quite unfair.

G_M

If that is their lending policy, then that is their lending policy!

Unfair? You want to borrow money from someone then they are entitled to impose whatever conditions they want, or indeed, to refuse to lend. It is, after all, their money!

You could always try another mortgage lender.

MarkyMarkD

Hardly any lender will currently lend 100%. You will need a deposit of some sort.

But there is nothing stopping you remortgaging in order to obtain the additional funds you need.

PasturesNew

How much of your 50% do you 'own'? Any of it? All of it? None of it?

Jo*_2

I know everyone has to stump up big deposits these days but I guess I thought shared ownership was different. Thanks to all who responded.

brit1234

Your best not to stair case as it will be harder to sell. Better to put the risk on to the housing association rather than yourself.

ViolaLass

brit1234 wrote: »

Your best not to stair case as it will be harder to sell. Better to put the risk on to the housing association rather than yourself.

Wouldn't owning the whole place yourself make it easier to sell?

Bargain_Rzl

PasturesNew wrote: »

How much of your 50% do you 'own'? Any of it? All of it? None of it?

This may very well be the key to the OP's problem.

If you own your 50% outright, no remaining mortgage, then I would imagine you would be able to find a lender (not necessarily your current one) who will consider that you do in fact already have 50% equity, whatever the value of the property happens to be.

If you have an outstanding mortgage on more than 50% of the value of your remaining 50%, then you do not have the equivalent of a 25% deposit. You own less than 25% of the property.

Re ViolaLass's question: not necessarily. If the OP is in an area where there is high demand for affordable housing, and it doesn't have any features that make it stand out from other properties on the open market, it is entirely possible that it will sell more readily as a shared ownership property. However it is probable that the process of selling it will be a lot longer-drawn-out, especially if it says something in the lease about the housing association having the right to advertise it to their own clients first.

I'm looking into this myself for future reference, and I am of the view that my shared ownership flat will probably be better off staying shared ownership. I'm massively overpaying my mortgage at the moment and planning on moving on once I've cleared the mortgage on my original (40%) share - even if I have to take a lower offer, it should provide a more than adequate deposit on a larger, non-shared-ownership flat. But I'm only just outside Central London, and affordable housing here is in very high demand.

brit1234

ViolaLass wrote: »

Wouldn't owning the whole place yourself make it easier to sell?

No as people would have harder time being able to afford to buy. You would have an easier time selling with less of a share and a bigger pool of buyers.

We have discovered it is more economical to pay more off the existing mortgage than taking an extra 50% mortgage out.

ViolaLass

brit1234 wrote: »

No as people would have harder time being able to afford to buy. You would have an easier time selling with less of a share and a bigger pool of buyers.

We have discovered it is more economical to pay more off the existing mortgage than taking an extra 50% mortgage out.

Fair enough. I hadn't thought of it that way.