Shared Ownership Staircasing advice

MrThriffty

Hello. First time post on here. I currently own 50% of my shared ownership property and have recently paid off the mortgage on this. I am now just paying rent on the council owned 50% that I do not own and am looking to purchase the the other 50%, so that I fully own the property. I have made several improvements to the home over the last 10 years and have certainly increased the overall value. I am after advice as I am concerned that I will be penalised by having to purchase the remaining 50% at the value the property is now worth, rather than taking into account what has been spent by myself. An example of this is that I have spent £20k on an extension and am worried I will have to buy this again if I take out another mortgage as It has obviously raised the value. Has anyone had any experience of staircasing in this way and succeeded in having their improvements acknowledged in the surveyors valuation? Also, could I use an independent surveyor as I feel a council appointed one could work against me. Obviously, I want to get the house valued as low as possible as I plan to buy and not sell. Many thanks.

csgohan4

20 k of renovations doesn't always = 20k of house price value, you own 50% share of the house and therefore to buy the other 50% it will be 50% of the valuation at present

you can't have your cake and eat, your equity will go up and so will the cost of buying the other share which should cancel eath other out in that respect as it's 50/50

HanPop

Hi, last year we bought out the rest of our shared ownership property. They valued the house at £175,000 overall and because we’d made improvements they reduced the overall value to £165,000 and the extra 25% we were buying was based on that figure instead. Also you have to use an independent registered surveyor and they were very fair to be honest. Hope this helps.

MrThriffty

HanPop wrote: »

Hi, last year we bought out the rest of our shared ownership property. They valued the house at £175,000 overall and because we’d made improvements they reduced the overall value to £165,000 and the extra 25% we were buying was based on that figure instead. Also you have to use an independent registered surveyor and they were very fair to be honest. Hope this helps.

That's very helpful. Thank you. Was it the Housing authority that took in to consideration the improvements you made, or was it the Independent surveyor that you used? Sorry for what sounds like basic questions, but I have been reading posts on here for last few hours and have not read anything covering my questions raised.

HanPop

It was the surveyor who took into account the changes we’d made (we pointed them out to him) and recommended the price for the housing association minus the ‘upgrades’ that we’d made. It was a fairly quick process with the housing association but took a year for the land registry to update the property as freehold which was a bit of a pain.

MrThriffty

HanPop wrote: »

It was the surveyor who took into account the changes we’d made (we pointed them out to him) and recommended the price for the housing association minus the ‘upgrades’ that we’d made. It was a fairly quick process with the housing association but took a year for the land registry to update the property as freehold which was a bit of a pain.

Sorry to mither you further, but did you have to provide much supporting evidence to the improvements that you made, like photo's, receipts ect? Thanks again.

HanPop

No we didn’t have to supply any evidence BUT we didn’t do as much to the property as you have, we just had fitted wardrobes and a landscaped garden etc and obviously kept it in a good state and nicely painted walls etc. If I was you I’d contact the housing association and tell them you are thinking of staircasing and then instruct a surveyor that they approve of and then see what the surveyor says once he’s been to your house and noted the improvements that you’ve made. If you don’t agree with him then you should tell the housing association your reasons. Remember that you don’t have to go through with the purchase if you don’t want to and you’d only be out of pocket for the surveyor if that was the case. But to be honest if you’ve spent that much on the property and have before and after pictures and it adds to the value then I don’t see why you’d have a problem buying the extra share for the price it is worth today minus the value your extension has added to the property. Which housing association is it? Ours was Bromford homes.

MrThriffty

It is Arena housing. I'm just a bit confused in that you initially said you used an independent surveyor. Did you choose the this surveyor yourself, or just take the approved one by the housing association?

jonnygee2

20 k of renovations doesn't always = 20k of house price value, you own 50% share of the house and therefore to buy the other 50% it will be 50% of the valuation at present

you can't have your cake and eat, your equity will go up and so will the cost of buying the other share which should cancel eath other out in that respect as it's 50/50

In most cases, this wouldn't be correct. The standard lease terms for shared ownership include a clause which excludes improvements from the 'market value' used when valuing to staircase to 100%.

It will be in the terms of the lease, normally as an exclusion under the definition of 'market value'.

HanPop

You can use an independent surveyor but they must be registered with the RICS.

Neli

Hi Everyone, this my 1st post on here. I hope it comes up as a new thread. I need some advice, My offer has been accepted for a mortgage for SO 2 bed flat, at the time I only purchase 25% but I wish I purchased more. I have made a 5-year plan ahead, thinking to pay the mortgage off in 3 years max then staircase after.

What do you think it's better to do?. To staircase while on mortgages or with no mortgage (mortgages paid off) buy shares each year while continuing paying rent of whatever the value is and balance is left? The 2 bed flat is 350k and balance is 73k. I look forward for here you experience and advice if I got it Ll wrong.in understanding please correct me. Thanks!!! Neli