Staircasing on 1 Bedroom Flat 31 December 2012 at 2:01PM in House buying, renting & selling 8 replies 896 views

SBrown86

Hi there, long time reader and first time poster.

Nearly two years ago I bought 52% of a 1 bedroom flat. Now I am in a position where I can afford to purchase the remaining 48% (I have money for a deposit to increase the mortgage). Is this worth doing? I intend to live here in the long term and at the moment it feels like money is being wasted on rent, but obviously I'm not sure if the money is better off in a savings account in the longterm.

All opinions welcome.

tim123456789

SBrown86 wrote: »

Hi there, long time reader and first time poster.

Nearly two years ago I bought 52% of a 1 bedroom flat. Now I am in a position where I can afford to purchase the remaining 48% (I have money for a deposit to increase the mortgage). Is this worth doing? I intend to live here in the long term and at the moment it feels like money is being wasted on rent, but obviously I'm not sure if the money is better off in a savings account in the longterm.

All opinions welcome.

If you want to sell on at some point it is best to own 100%

many prospective buyers will walk away from buying someone else part-owned property

tim

peachespeaches

I live in a house that I own 50 per cent of, so I know how it works. I have pondered this question too. My mortgage is about 600 per month, rent 200 per month. At the moment I can't afford to buy 100 per cent, but if I came into some money, I would. I think I am likely to be here long term, but no one knows what is around the corner. My next door but one neighbour failed to sell recently because buyers didn't want to get involved in the shared equity thing.

Work out how many years rent is equivalent to the mortgage for the other half. For instance if you would have to pay rent for 30 years to equal the amount you'd spend on the extra mortgage, ask yourself if that is appropriate or possible at your present age. The answer will be different for a 30 year old versus a 60 year old. Also look at what will happen on your death, do you have someone to leave the flat to? Will they want it? What provision have you made for serious illness or injury that might mean you can't work?

I can't give you the answer, but hope the above gives you food for thought.

brit1234

tim123456789 wrote: »

If you want to sell on at some point it is best to own 100%

many prospective buyers will walk away from buying someone else part-owned property

tim

I'm of the opposite view. If you intend to sell don't staircase anymore, shared ownership properties with higher shares are harder to sell as people cant afford them. Instead pay down your existing mortgage.

If you are going to live their the rest of your life probably best to get mortgage for whole property as service charge and rent usually go up above inflation.

SBrown86

Interesting, it may be better to leave it as is then. As I don't intend staying forever and probably 1 bedroom is more suitible for FTB who can't afford to buy the whole property outright.

kingstreet

Find out, perhaps from local agents and your Housing Association, what the market is like for SO "resales," so you can establish which is the best route for you and your property.

In some places, staircasing might be a great idea. In others it may be lousy. Worth remembering, a fully owned house can be freehold, a flat will always be leasehold.

Kynthia

tim123456789 wrote: »

If you want to sell on at some point it is best to own 100%

many prospective buyers will walk away from buying someone else part-owned property

tim

I agree with this. Selling shared ownership is a nightmare so if you can own 100% before selling it is better. However only staircase if you are going to 100% as owning a high percentage can actually make selling even harder than owning a lower percentage.

Richard_Webster

How much do you owe on your present mortgage?

What would you have to pay to buy the 48%?

Are you looking to get a 90% mortgage? If not what percentage?

rob404uk

can you let the flat with 100per cent. housing associations are funny with this and as the free holder they might deny you right to let. if so I would never buy the full amount. I do have a bad experience of shared ownership mind, so I could be biased