Co-ownerhip, staircasing & negative equity

esson1

Staircase now and remember theres no such thing as an independent financial advisor

BigAl94

posted in wrong section

GoFigure

From an interest rate charged perspective your lender may be right - co-ownership rent is charged at 2.5%pa whereas your mortgage rate is probably higher, and you also have to repay capital if you raise your mortgage, with co-ownership you are paying interest only.
What you've said is right - if you staircase now you are buying out the co-ownership's share at a low value.
If house prices/values increase so does Co-Ownership's share, which then costs you more to buy out. All things being equal it makes sense to buy Co-ownership out when prices are low, rather than when prices are high.
It's impossible to call the bottom of the market until after it has passed - if you are unsure you can buy out chunks at 5% a time, but each time you staircase you do have to pay legal fees so take this into consideration.