Shared ownership property-buy/rent or sell

blondie8138

I currently own 50% of a shared ownership property in London, with the other half owned by a housing association. I am planning on travelling abroad, with the possibility of working, for up to a year. I am looking for advice on what to do with my property.

I have just had it valued, and in the 7 years since I bought it, it has gone up in value by £50,000. I was thinking of buying the other share and then renting the property out, but I'm not sure if the rent would cover the new monthly mortgage payments. I would also have to put down a significant deposit for the new mortgage, which I am not sure I could afford. I would also have to pay a letting agent to manage my property while I was away, which would also add to monthly costs. I'm not sure if I could buy the property and then rent it out straight away-would this be allowed?

I could sell the property and make a small profit on the 50% I own after paying fees to solicitors/estate agents/housing association. I would then be free to go travelling, but I may never have a chance of having a property again! I am single and only have a 1 bedroom flat, which was acquired by chance and opportunity, but I now feel like it is a burden and difficult to manage all the bills on my own.

Does anyone have any advice on what the market is like at the moment? Would I be mad to sell now, should I hold on for a while? What is the rentals market like these days? Is it easy to find secure tenants? Ultimately, should I keep my property as an investment for the future, or sell and take the money toi live my life?!

kingstreet

You may find it difficult to obtain consent to sublet from the HA. These are social housing properties and permission is normally not given. If you take out a new mortgage when staircasing, again you will struggle to get consent to let from the lender in the early days.

blondie8138

My intention was to staircase, buy all of it, then rent it out, I knew I could not sublet. How long would I have to wait once I bought all of the property before I could rent it out?

Would your advice be to sell then?

kingstreet

What makes you think you'll get consent to sublet when you own it all? Subletting is part of the lease and that will remain the same even after staircasing.

Ask the HA if it remains policy to refuse consent to sublet in all circumstances.

blondie8138

I am in contact with someone from the housing association, and they have just said once I own it all I can rent it out straight away. Do I now need to check this with the mortgage company too?

kingstreet

Yes. You need written consent from the HA and from the lender.

Goldiegirl

Generally speaking once a person buys the final share of a shared ownership property, the Housing Association has no further interest in the property. If it's a house, it becomes a freehold house. it might be worth speaking to the HA about your plans to see if there would be any objections after you own 100 percent of the property. For example, if it's a flat, it would remain a leasehold flat, so there might be something in the lease to prevent the property being let.

You'd definitely need to get Consent To Lease from your lender.

Goldiegirl

Just looked at your OP and I see it is a flat.

Definitely be worth speaking to the HA first, although you would own 100 of your flat, as leaseholder there may be something in the lease that prevents you letting the property.

kingstreet

Yes. Despite owning all the property, the lease still governs the ownership and if it prohibits subletting, the HA can still turn down an application.

HAs, being registered social landlords, don't want their property being used for investment purposes, accidental or not. Hence my comments earlier.

If it was a house which was being changed from leasehold to freehold it would be a different matter.