Staircasing to 100% vs continuing to rent 50% and save: Shared ownership

scott1a

Hi All, 

We have been doing a shared ownership of 50% for about 2.5 years now and have been lucky to be able to overpay quite a bit and on remortgaging paid down a substantial chunk, with about 60% left of our 50%. As we can only do that some much within a mortgage period without incurring fees we are getting to the point where it would be affordable to staircase to 100% for our extra savings.

When we look at the rent of 300 per month on the 50% it isn't very far off from the amount we initially paid on interest vs what we gain in equity on the initial mortgage. In our minds then increasing the mortgage to 100% wouldn't make sense until we pay off the 50% mortgage fully as we continue to decrease our interest faster this way. The money we would have added in equity on the 2nd half of the mortgage then instead goes straight to decreasing our current mortgage every two years when we remortgage (for whatever cannot go in earlier because of overpayment limits). So unless we expect the house price to increase substantially (since staircasing would be at the new market value), does this logic make sense? With perhaps with a potential depression as a result of both Brexit and the effects of the virus on the economy, a spike in the house price seems unlikely.

Hoping this train of thought either helps someone else out or of course if someone's reply to it punches a hole in this logic, that it helps someone avoid this same train of thought!

Thanks for any help or thoughts you might have it on this! 
Scott

izoomzoom

Hi, we are in a similar position, but we are finally proceeding with our other 50% purchase. We are quite a bit down the road from you though - we bought 14 years ago, and house has increased in value by a lot more than I thought. Like by 60%, so our second portion is quite a lot more than our first half, but we're benefiting from the increased equity and we are finally (other) debt free and probably much closer to retirement age than you.
I suppose no one can really tell you what to do. It's swings and roundabouts. Good luck with what you decide.

dimbo61

Well done on overpaying over the last 2.5 years.
If you can afford to buy the rest of the property Why Not !
Selling 100% of a property is alot easier than dealing with shared ownership properties.
Find out how much it's going to cost to buy the other 50% and if you can afford too why not take the plunge.
You have already invested money and 2.5 years of your life in the property and if suitable for your needs great.
You can always sell in a few years in you need a bigger place

grayg

One thing to consider is if you staircase to 100% then that's one less shared ownership property available. I am pretty conflicted about it, as I feel very fortunate to have had the chance to get the property I am in now, so why deprive someone else of the same opportunity. Just a thought, albeit appreciate it's difficult to pass up the opportunity to capitalise on your strong position. 

ChloeManoey

grayg said:

One thing to consider is if you staircase to 100% then that's one less shared ownership property available. I am pretty conflicted about it, as I feel very fortunate to have had the chance to get the property I am in now, so why deprive someone else of the same opportunity. Just a thought, albeit appreciate it's difficult to pass up the opportunity to capitalise on your strong position. 

I think about this too, I really think they should be put back to a starting percentage on resale, otherwise the stock will just die out 😕 Same for staircasing to anything between 50 and 100%, prices out soooo many people sadly