Staircasing vs Selling

plumsoup23

Hi all - I'm hoping there's someone who knows a bit more about this than me, so here goes!
TLDR: do I staircase from 30% to 100% then sell, or just sell the 30% share?
My partner currently has 30% ownership in the flat we live in. We are looking to buy a house as we need a bit more space. The flat has gone up by around £20,000 in value since he purchased a few years ago, and we want to maximise the equity he can get out so we have the best possible deposit going forward. At this juncture our options are as follows:

• Staircase his share up to 100%, with/without me on the new mortgage and then sell
• Sell the 30% share

My understanding is that there's a cost to staircase, plus the new mortgage would be on the current value and not the value my partner originally purchased at. I've reached out to a few finance companies who don't seem to know how to advise me or where to point me. I'm not sure on the best course of action that will leave us with the most money at the end. All advice appreciated!
Thanks

Comms69

I'm confused why you think staircasing would in anyway mean you have more money?

The flat is valued at X, you either pay 0.7 of X to staircase to 100%, or you cash out the 0.3 you currently own.

edgex

Nowhere near enough info to go on.
Are other local properties that are shared-ownership selling?
What are the costs for the staircasing, as in fees etc?
Would a new mortgage be available, & if so would it be a better rate?
etc etc etc

plumsoup23

Comms69 said:

I'm confused why you think staircasing would in anyway mean you have more money?

The flat is valued at X, you either pay 0.7 of X to staircase to 100%, or you cash out the 0.3 you currently own.

Because it would mean we'd own 100% of the property and I'm really green when it comes to staircasing/part ownership as I've not dealt with it before. We'd be taking a mortgage on the 100% less whatever equity we have in it. 

plumsoup23

edgex said:

Nowhere near enough info to go on.
Are other local properties that are shared-ownership selling?
What are the costs for the staircasing, as in fees etc?
Would a new mortgage be available, & if so would it be a better rate?
etc etc etc

Local properties are selling but the estate agent who valued our flat a few months ago couldn't tell me if they'd sold at 100% or part buy. 
There's a flat rate fee (which I'll need to look up) for staircasing plus solicitors fees.  Plus any new mortgage arrangement. 
A new mortgage is available at around the same rate but obviously for more money as the mortgage is currently only on 30% of the property. 
Even an idea of what I need to look into would be great. Thank you so far 

blue_max_3

Surely waiting and hoping for a reduction in value, would mean it was cheaper to go to 100%

edgex

You've spotted one issue with staircasing, namely that there's fees, & possibly re-arranged mortgage, each time you do it. That could be £2000. So, if your going to do it you do it the least number of times possible.
In your case, there is also the issue that the value has gone up. So, you could double the size of the mortgage but only end up with 50% ownership. That is unlikely to change the sell-ability.

To maximise the equity for a deposit, you need to reduce the existing mortgage. If you've got enough cash to cover the staircasing costs, either put that towards the existing mortgage or the deposit. If you can afford to, overpay the mortgage as well.

blue_max_3

I have to say, I'm pretty cynical about shared ownership. However, surely the point is that people can buy something, rather than rent forever. I don't think the 100% makes a particularly attractive offer. You're more likely to find someone who wants to buy at the lower level in my opinion.

csgohan4

blue_max_3 said:

I have to say, I'm pretty cynical about shared ownership. However, surely the point is that people can buy something, rather than rent forever. I don't think the 100% makes a particularly attractive offer. You're more likely to find someone who wants to buy at the lower level in my opinion.

But possibly could be false economy and you end up paying more, SO usually leasehold  and your at the mercy of freeholders and the repair costs are not cheap, But suitable for others, not for others

blue_max_3

csgohan4 said:

But possibly could be false economy and you end up paying more, SO usually leasehold  and your at the mercy of freeholders and the repair costs are not cheap, But suitable for others, not for others

I'm not sure you understood - I was suggesting to leave it at 30%. Personally wouldn't touch it with a bargepole at any price, but they are probably more likely to snare someone with a cheaper offer.