Shared ownership simultaneous staircasing - who keeps the profit?

eddddy

SeasidePanda wrote: »

Thank you everyone for your help! I will update this thread once I have info from HA in case stumbles upon it in the future.

Hi SeasidePanda

Can you explain how you expect to make a profit by doing this?

Because nobody here believes you can.

It would be good if you could show your calculations, like...

- how much you expect to spend on staircasing
- how much you expect to sell the property for
etc

Thanks

Cakeguts

Do you know how much you can borrow for a mortgage on the house that you want to buy? The problem is that when house prices rise they all rise so although you get more for your 1/4 of the housing association house your next house will also cost more. Is this what is causing your problem?

You can now work out what you will have left over when you sell the 1/4 of the housing association house after all the mortgages have been paid back to the bank. So you add that money to the amount that you can borrow and that tells you how much you can pay for your next house. ( You may have to look in a cheaper area.)

Justthefactsplease

Re your enquiry for back to back or simultaneous staircase, there is no need to access further borrowing etc, this is the whole point of back to back staircase. You basically agree to sell your share at the same time the housing association sells their share. You have to pay for a valuation which then sets the price of the property. You can then put the property on the open market and sell it 100%. If the property is a flat the HA will grant a new lease at their cost. If it is a house then the buyer would own the freehold, however may still be liable for any maintenance payments for communal areas, car parks etc.
Once sold whatever your share was is the share of the sale proceeds you will receive, minus legal costs. You cannot sell for less than the valuation, unless you agree to compensate the HA for their loss pro rata, you can however ask for more than the official valuation.
The process shouldn't complicate conveyancing if your solicitor knows what they are doing, as there are a couple of forms they MUST complete and register at land registry to remove your property shared ownership to lease/freehold.
All of this of course is dependant on the rights/rules that are in your lease, but the whole point of back to back staircase is for properties on low leases which you would never be able to sell as a share. Extending the lease on flats is very expensive and biased against the tenant, they have to pay legal costs for both sides and the premium, although some HA agree the premium paid is pro rata, ie 25% share, you pay 25% of the premium, but as I say the legal costs are incredibly high.
Once your lease falls below 70 years banks etc are reluctant to lend against these properties, so selling 100% is your only option for disposal.
I'm only commenting on our situation being in a shared ownership flat, with regards to houses I believe you can't extend a lease, so selling 100% or stair casing to full ownership yourself would be the only option.
As for restricted staircase properties as in the rural ones you can't own outright, these must have their own set of rules as they have to be retained as affordable housing.
All the rights and details of what you're entitled to do will be in your lease, so a trip to a solicitor may well be in order, as even some HA aren't fully briefed on the how's and whys of it all as these issues are only coming to light now as the early leases are now get below 70 years.
Another point to observe is anyone extending an older lease will now have to be put on a new homes & community model lease 2015, otherwise the HA lose their government funding, so who knows what clauses will be included in the newer lease. From what I can gather newbuild shared ownership rents are now liable for stamp duty also, which can run into a few thousand when you calculate the future rent totals over 125 years!
Anyway I digress, you do not need to borrow monies to back to back staircase and sell 100% on the open market, but you do need to know if there are any restrictions in your lease, I hope this helps, as it's what I've found out from our HA, not what people assume or think what should happen as is all too often posted on these forums.