Buying more share in this house?

Jani9

Afternoon everyone,

I just wondered if anyone has been in the same position as me or if you have any advice.

We got onto the property market almost 2 years ago on a part mortgage part rent new build scheme.

We have the mortgage for 30% and pay the rent for the rest.

It was a great way to get our own place and didn't need a massive deposit which was ideal at the time.

The only thing I have thought about in the past few months is once we have paid the mortgage off in 28 years we will only own 30%.

Now I know we will move before then but we do have the option to buy more % of the house. This in turn will drop the rent down as we will own more of the house.

When we do sell we have to go through the scheme to sell. I'd imagine they will look to sell the house to similar people on a similar scheme so will want to keep the price of the house reasonable to sell quickly.

If that is the case I could be buying more of a house which isn't going to go up in value.

Do you think I should move and put my money into a place I'll own 100% at the end or buy some more shares of my current house.

We do like where we live and wouldn't consider moving yet if I wasn't thinking of this.

Thank you in advance.

zzzLazyDaisy

The thing about shared ownership is that while they provide security, and in expensive areas can work out cheaper than renting, they are often overvalued.

The valuation is done on the whole house, so if values do drop, at the moment any loss is shared between you and the HA 30/70. So if you think you may wish to move over the medium term, my own view would be to leave the shares as they are, but work on paying down the mortgage on your share, and pay it off as quickly as possible. This would give you a hefty deposit to put down on your next house, which may enable you to buy on the open market, and avoids you taking on a larger mortgage and therefore paying more interest. This probably makes more financial sense as the bulk of the fees on SO are often in the maintenance charges and ground rent, which doesn't alter regardless of whether you fully own or part rent.

But you'd obviously need to do the maths yourself.

Jani9

Thank you for the reply.

I think you are right about get the mortgage paid off as soon as possible on our 30%.

I've worked out via the mortgage overpayment calculator that with £500 per month overpayment I will have it paid off within 5 years 10 months.

Depending on how the market goes we should have £50k from our 30% share to then put down on a house that we'll own 100% once fully paid.