To staircase to 100% in shared ownership property or not?

Tainted_love

We own a 50% share of a 3 bed semi townhouse. We love living here and did consider moving but have decided to stay put. The rent and service charge we pay on the other 50% is £150 per month making the monthly cost of mortgage and rent combined £460 per month.

We are in a position where we could staircase to own the property outright. We have some equity in the property and savings to add to this to form effectively a 15% deposit of the value of the whole property. We have been approved for a mortgage of that value. If we did this the monthly payments would increase by approx £170 per month. We can afford this at the moment but I am considering cutting my hours at work which old still make it affordable but less disposable income available.

Is it best to buy it outright now so that we fully own the property or enjoy not paying as much per month to live in the same property and be able to save more each month? The thing that worries me with not buying it outright is that if we are still here when the mortgage ends then we still have to pay rent which would have to come out of our pensions!!

Tainted_love

Bumping this thread!

cattie

How old are you? Only with you mentioning pensions there could be different views on what people would do if they had retirement on the horizon compared to somebody who still has many working years in front of them.

richardw

Would you be getting the freehold or a lease?

Would you be paying 3% stamp duty?

Would the HA still want you to sell to other shared ownership buyers even if you had 100%? If so, would there be many SO buyers that could afford 100% and the stamp duty at that value?

There's a lot in the small print of your current agreement with the HA, which you really need to have a thorough read off.

Building_Surveyor

if you staircase to 100% then you should be able sell the house on the open market, the house is no longer a shared ownership property - check your paperwork

If you were to go to 100% check with The HA if there is an option to buy the freehold, as if you go to 100% and its leasehold, you will still have to pay a ground rent. You need to check how much that would be.

richardw

Building_Surveyor wrote: »

if you staircase to 100% then you should be able sell the house on the open market....

Many HAs want to retain shared ownership properties, so even at 100% there could still be future sale covenants, this is most definitely a "check the paper work" situation as suggested.

EmmaHerts

It is nice to hear someone happy with their shared ownership !

Tainted_love

I will check the lease again but I'm pretty sure that once staircased to 100% then it is no longer a shared ownership property and the involvement of the HA ends completely. It is currently leasehold but on 100% staircasing it becomes freehold. I already paid stamp duty of the value of the full property when I bought the 50% share.

At the moment when we looked into selling, the HA didn't have a waiting list of prospective buyers so it would have been our choice as to whether the house was to go on the open market either as a 50% share or as a 100% " normal" sale. If we chose to sell it as a 50% share then the buyer had to be improved by the HA but the eligibility criteria was that they earned a household income of less than 60k and didn't already own a house. If we chose to sell it as 100% then anyone could buy it.

Yes we are actually happy with our shared ownership property, I can see the problems people may have with them but it has suited us, allowed me to work part time and live in a house/ area that otherwise would have been unaffordable.

blckbrd

Is the property on an estate? There may still be service charges if so.

Tainted_love

Thanks for replies.

I am 35 yrs old and my husband is 34 in reply to the poster who asked how old I was.In terms of retirement and pensions, its a long way off but i like to think ahead!

I have read the lease and spoke to the HA regarding the above comments made by posters.
If we were to staircase to 100% then we would automatically gain the freehold so no ground rent to pay. There would be no service/maintenance charges also, purely the mortgage to pay.

Also there are no restrictions/covenants with regards to selling on, it just goes on the open market, anyone can buy it at any price. On staircasing the HA is no longer involved at all and it is purely the same as owning a "normal" standard property. So to buy or not to buy?!

Tainted_love

Also I have paid stamp duty on my share so would need to pay the other half (£650 approx)