Staircasing or Move House?

gazfocus

Hi all.

I current own (with mortgage) 50% of a shared ownership house. I paid £62,000 for the 50% share and mortgage is at 90% LTV. My current fixed deal ends in July 2014.

By the time my fixed deal ends, I will have approx £50,000 saved up and I'm struggling to decide whether to:

a) Use the £50,000 to help me (and my wife) staircase to 100%
- If we used the full £50,000 as deposit, we would be looking at a total LTV of approx 55%
- Total mortgage required would be approx £67,800.

b) Use the £50,000 to buy a bigger / better 'forever' house.
- Going by the Halifax mortgage calculator, with both mine and my wifes salaries, we could get a mortgage of upto £168,000.
- Looking at houses in our area, we could get a 'forever' house for around £169,000 so with a £50,000 deposit, we'd be looking at approx 70% LTV and a mortgage of approx £119,000.
- I assume, however, that we would need to sell our existing house first, which being a 50% shared ownership may be difficult.

Can anyone offer any advice please as I'm really unsure of which route to take. We have just spent a fair amount of money having a conservatory built, etc, but I'm thinking that these things will make the house more desirable than other similar houses on the street.

donfanatico

I wouldn't staircase as it will be harder to sell later as the market of buyers will shrink due to most people wanting shared ownership will not buy 100%

I might be completely wrong though...sorry i cant be of more help

gazfocus

donfanatico wrote: »

I wouldn't staircase as it will be harder to sell later as the market of buyers will shrink due to most people wanting shared ownership will not buy 100%

I might be completely wrong though...sorry i cant be of more help

Thanks for your post. If we were to staircase, it would be to 100% so it would eliminate all shared ownership buyers.

donfanatico

gazfocus wrote: »

Thanks for your post. If we were to staircase, it would be to 100% so it would eliminate all shared ownership buyers.

Sorry what I meant, even though you will have 100% , does HA still have first option to sell? read your lease.

If yes, your market will be much smaller and you might need to wait weeks before it could go to the open market

gazfocus

donfanatico wrote: »

Sorry what I meant, even though you will have 100% , does HA still have first option to sell? read your lease.

If yes, your market will be much smaller and you might need to wait weeks before it could go to the open market

Hi.

According to the lease, if we staircase to 100%, we will own the property and the freehold. We have to give the housing association the option of buying back the property but we do not have to give them the opportunity to sell it first.

If the house remains 50% shared ownership, we do have to give the housing association the opportunity to find a buyer but then we have the option of either selling the house as a 50% shared ownership property, or as an outright sale as if we owned the full property (then the money gets split 50/50).

donfanatico

gazfocus wrote: »

Hi.

We have to give the housing association the option of buying back the property .

Are there any timing limits set? How long for them to decide of buying back or not?

Can they buy back just the 50% then?

gazfocus

donfanatico wrote: »

Are there any timing limits set? How long for them to decide of buying back or not?

Can they buy back just the 50% then?

I've just spoken to the HA and I was wrong. If I staircase to 100% the HA will have no interest in the house whatsoever. Therefore, we would be free to sell it on the open market for whatever price we wish.

However, I still think we might be better off selling as a 50% shared ownership.

Kynthia

If the choice is buy all of your current house or buy your forever house then why not buy your forever house??? Why incur fees for survey and solicitor on staircasing and then again on a forever home in the future when you can do it once? Is there a reason you don't want the forever home yet?

PasturesNew

Don't staircase, it limits your future market for selling it on a lot of levels.

It's also my opinion that the £s you pay per % is disproportionately high compared to the open market, so you're buying further into an overpriced item.

Buy your own forever place now and be done with it. No more guessing or mathematical gymnastics. In and done.... relax and enjoy.

ethank

Have you spoken to the HA, quite often they will buy back your Shared Ownership property.

bryanb

There's no such thing as a forever house, circumstances change. No help on the question just an opinion.