Shared ownership Staircasing advice - help!

LJ_1

Hi all –

Desperately need some advice….

I purchased 55% of my property back in 2007. I didn’t have much deposit to put in at the time and was desperate to stop renting so I went down the S/O route.

I am now in a position to purchase the rest of the property (I have checked my lease and I am able to increase my stake to 100%).

Original price of flat: £275,000
Deposit: £13,000
Initial mortgage: £139,220
Remaining owed on mortgage: £110,000

I have contacted the HA and had a surveyor out to view my property and it was valued at £280,000 (although the flat below me was on the market recently for £250,000-£280,000 so I am trying to find out what this sold for).

I am able to get a mortgage up to this value – the difference between my current payments of mortgage + rent Vs paying full mortgage is around £125 per month extra which I can afford. I begrudge paying the rent portion to the HA each month as I feel I should be paying this towards my equity.

I have just had my letter and report back from the HA today outlining the numbers. They have said –

Property value £280,000
Value of HA’s 45% share £126,000

However they have then said that they would be prepared to seek formal approval from the Association for the sale of its 45% equity to me for the sum of £146,000??

My questions are –
Can I negotiate the value of the flat?
Why is this £19,000 more than their share is worth? I was under the impression staircasing was to enable to you to buy more based on the properties value?
Can I negotiate this number
What is the best way for me to tackle this with the HA.

Thanks

gazfocus

I would write back to them saying that as the value of the HA's 45% share is £126,000, that is what your offer is.

We're in the process of buying a shared ownership property ourselves and haven't seen the lease yet but it might be worth checking in there to see if it says anything about the staircasing being at the market value.

richardw

Does it say somewhere in the agreement/contract with the HA that the value must be ascertained by a Chartered RICS Surveyor/Valuer?

Was the Surveyor that valued the property in accordance with the agreement/contract with the HA?

LJ_1

This is what they advised me when I initially enquired -
In order to staircase up we would first of all need for you to notify us that you would like to do so, which I can see that you have. We will then send you acknowledgement of your request to staircase up, with an application form to start the proceedings.

On looking at your lease I can see that you are able to staircase up and are welcome to do so in multiples of 10%.

On receipt of your application form , I then instruct a valuer to arrange with you a time mutually convenient for the property to be valued.

On receipt of the valuation from the valuer, I will then make you an offer. This valuation is only valid for 3 months.

On accepting the offer, I then instruct our solicitors and you instruct yours, then we await to be advised that the staircasing has been completed.

I cannot give a definite timescale for completion, however all offers, instructions and acceptance needs to be made in writing.

The amount that you pay is based only on the current value of the property.

I have attached a copy of a list of Approved Mortgage Lenders for your information.

Do not hesitate to contact me if anything is unclear.

All looks pretty straight forward right? So I sent back the application and they arranged for an independant valuer to come round who is a FRICS MCIArb Registered Valuer...

I would pay the valued price but if I can negotiate even alittle it would be good.

It's the extra £19,000 I have no idea what to do about?

gazfocus

The bit that I would quote from that is:

"The amount that you pay is based only on the current value of the property"

So ask them what the additional £20k is for.

richardw

LJ_1 wrote: »

It's the extra £19,000 I have no idea what to do about?

er don't get that either, perhaps best to ask them directly.

My guess is they've added on their costs, but £19k seems high for this.

richardw

LJ_1 wrote: »

On looking at your lease I can see that you are able to staircase up and are welcome to do so in multiples of 10%.

This may be the catch, you want to buy 45%, but this isn't in multiples of 10%, I think they may have rounded up to 50% and added £6k on for their costs, just a guess though, best to ask them.

LJ_1

Good spot - I will ask them.

I have mailed them today but the person I am dealing with is not in the office.

A few of the other residents have sold and moved on and had to staircase to the remaining part and then sell on (able to do both transactions in 1 day as there is a clause in our lease). None of these paid extra to the HA...

kingstreet

I reckon it's a misprint or a C&P error and should read £126,000.