Shared ownership – staircasing while subletting advice

dee096

I own 60% of a shared ownership property in London and plan to staircase to 100%, but I’ll doing this while I’m subletting so worry this will cause issue. Does anyone have any experience or advice on how I can sort this out to own the full portion?
The issue is I plan to do this while abroad and subletting the property which I shouldn’t be doing.

My concerns are;

a) During the mortgage/buying it’ll be uncovered I’ve sublet / need to let-out and I’ll be pushed to take a buy to let mortgage

b) If the housing association find out in the process I’ve been subletting this could cause an issue in the transaction from them, and they may not allow staircasing to 100% on a buy to let mortgage anyway, as I don’t ‘own’ it yet.

My situation is that I was offered and accepted a job abroad in June. Rather than lose my SO property I rightly or wrongly chose to wait until now to staircase to fully own, as I now have a higher salary from taking the job to do so + my fixed mortgage is up so timing works out.
I plan to use a broker to hopefully help me with this, though seek advice here first.

Thanks!

Wanderingpomm

What does your lease say about sub-letting? Can you be evicted from your property by the housing association?

Ozzuk

This might not end well for you if they find out. What else have you missed - tax/insurance? Electrical/gas checks? EPC? Protected their deposit - just on that one if the tenants find out (which they can easily) then they can come after you for 3x the deposit.

It can all unravel quite quickly, time to get your house in order, literally! (assuming of course you aren't doing all this already).

NineDeuce

You might have been offered a job abroad but you are wanting to have your cake and eat it.

The rules of SO are crystal clear about not being able to sub-let. The scheme is designed for first time buyers to invest and have their own home.

Rather than prevent you from staircasing, the housing association may just have a case to evict you as you will have broken the terms of your agreement.

Lunchbox

I don’t think this will go well for you. Remortgaging involves the same identity checks as mortgaging, and it will quickly become apparent to the mortgage provider and conveyancer that you don’t live at the address. When they discover you are breaking one of the fundamental covenants in your lease, they will not lend on it. Your property is essentially unmortgageable as it is, so your only option is to continue as is without staircasing or subletting and hope nobody finds out.

If and when your housing association find out, they will tell you to stop subletting, but can ultimately repossess if you don’t.

00ec25

you cannot sublet, you already know that

you can let it when you own 100%, but you'd probably need a BTL mortgage since you are living abroad and are unlikely to return within the normal time frames offered for consent to let periods

your current situation is on a wing and a prayer. let's hope your tenant does not have cause to be annoyed with you and decide a bit of vengeance reporting is called for.

have you registered with HMRC under the non resident LL scheme, or are you playing fast and loose with them as well?

dee096

[QUOTE=_Rather_than_prevent_you_from_staircasing,_the_housing_association_may_just_have_a_case_to_evict_you_as_you_will_have_broken_the_terms_of_your_agreement.[/QUOTE]


Historically, and confidentially I was told by an HA employee they never have evicted anyone breaking their lease by subletting. They've either come to an agreement or worst case they ask you to stop. In which case I can ask the tenants to leave and leave the property empty until Oct 2018 when I return. But this seems silly for all parties..

dee096

[QUOTE=they_discover_you_are_breaking_one_of_the_fundamental_covenants_in_your_lease,_they_will_not_lend_on_it._[/QUOTE]


Won't they be lending based on the new lease, for which I'm the owner rather than the past?

Pixie5740

They will be lending on the basis that you live in the property and are resident in the UK.

Ozzuk

You haven't answered all the other questions, which is up to you but if you aren't acting responsibly then you'll have a lot more issues than just the mortgage. You can ask your tenants to leave, but they don't have to, only a court order can force them.

You may be better of just hoping you don't get caught (morals/legal aside) and put any staircasing plans on hold until you are back in the UK (could be in your favour as it looks like prices are dropping in London). If you do that, you should still make sure you are doing the correct thing as a landlord- in terms of providing a safe environment for your tenants, protecting their deposit and of course paying any tax due.

dee096

I’m not as worried about the tenants or housing association, getting the mortgage while being abroad it the toughest one.

The apartment is new and I didn’t fill any official tax thing out. Not sure if it matters that the sublet doesnt cover the rent it just help towards it. Otherwise I could have left it empty. Maybe should have!