Financial advisor for shared ownership property

Hbailey_2

Hello, I'm looking for a financial advisor that specialises in shared ownership including staircasing.

I'm looking to purchase a property thats on phase one (2nd lot) of a new 6 year development in greater London. The share price we are eligible for is 60% and this still warrants a 20k deposit with rent paid on the remaining 40%. This rent is also predicted to increase by around £400 + year. Plus service charge of course.

According to the developers, each phase is increasing by 10-15k (even the 2nd lot of phase 1 aka our property has seen this increase and gone from 325k (original price) to 335k (our price) in one month).

With this in mind, our property would go up in value during the next 6 years as new phases launch but we want to staircase asap so as to own the whole thing/avoid rent payment.

I'd like to check if we are able to remortgage after 1/2 years and purchase the remaining 40%. Also need to take into account the rent payments from these 1/2 years and the rise in price of that 40%. Will this be a rip off?

Part of me thinks with a 20k deposit to just purchase a property that isn't on shared ownership or is on help to buy. Would love to speak to someone and provide more figures who can then advise...

Many thanks in advance!

haras_nosirrah

Hi. I am a mortgage broker who specialises in shared ownership and is recommended by a london based housing association. I have been working in the shared ownership market for 10 years.

Just a couple of questions

are you sure the rent increases through the year? Most housing associations I have dealt with have a rent review every april and the rent increases are capped at inflation plus a %, the one I work with primarily is inflation plus 0.5%. To go up £400 in a year would be very unusual

Also with staircasing with most you can staircase at any time you are able to afford to do so. You would pay additional stamp duty only after you went over 80% ownership of the property so you need to bear in mind the costs of staircasing

Hbailey_2

Hi there, thanks for your message.

I'll have to check the exact figures once available but the sales rep mentioned the rent on the non-owned percentage would go up each year and would be around £30 extra each month.

I'm just trying to investigate whether this particular shared ownership property is a good or bad deal taking into account the following:

Purchasing 60% of the property with a 20k deposit
Paying rent on the remaining 40%
Staircasing as soon as possible ideally within one or two years (apparently you don't need a deposit for this but mortgage payments increase)
Purchasing a property in the 2nd lot of phase 1 of a six year development which is increasing the property values rapidly. Will this make it harder or easier to staircase in the next couple of years? The sales rep mentioned remortgaging to buy the remaining 40%. When could this be done?

Really im unsure if my money would be better spent purchasing a help to buy scheme or normal sale with the 20k as a 5% deposit. The other thing to bear in mind is that I am self employed with one years accounts. My partner is employed and we are buying together.

All help much appreciated!