Second property with existing shared ownership flat

agx90

Hi,

Long term reader but first time poster!

Apologies if asked before but I couldn’t find anything matching my specific situation (shared ownership and second property).

We were in the process of selling our shared ownership flat but unfortunately ran into the dreaded EWS1 issue (do not yet have the certificate and won’t have it for at least a year) - our sale has fallen through. We are still keen to do all we can to proceed with our house purchase which will become our main home.

We currently own 50% of our shared ownership flat but mortgage free on our share and only pay the rent and service charges to our housing association.

As this is a shared ownership flat, would lenders treat this any differently to a second property owned 100% or will they simply take (as I hope) the additional outgoings into the affordability calculations and make a decision based on that? 

For the sake of clarity, I am aware that lenders have different policies around second homes (i.e. LTV Requirements) and also the additional SDLT. 

We are very keen to keep our purchase dream alive and hoping that our existing property being SO will not be a hinderance with lenders so appreciate any previous experiences of this or thought is much appreciated!

[Deleted User]

If the property is to remain empty then they would take the rent as a commitment and then likely also the council tax, utlities, any service charges etc.    I also wouldnt be surprised if they asked for a letter from the HA confirming they are ok with you buying a 2nd home as its quite unusual (although not wholly uncommon when cladding is involved)

agx90

Deleted_User said:

If the property is to remain empty then they would take the rent as a commitment and then likely also the council tax, utlities, any service charges etc.    I also wouldnt be surprised if they asked for a letter from the HA confirming they are ok with you buying a 2nd home as its quite unusual (although not wholly uncommon when cladding is involved)

Thanks @Deleted_User. 

Yes the property will remain empty. My intention is to continue to try and sell once we complete on our new place, this simply provides time to do so in a less pressured environment!

Affordability with these extra commitments should be fine based on initial checks with banks lending calculators but I didn’t appreciate the banks may want evidence from the HA allowing me to purchase a second property - I’ll be honest, I don’t know if leases usually have a specific clause on this as I didn’t really imagine being in this situation which has been driven by EWS1 and not a choice on my part. 

I will reach out to my HA to double check this but assuming they are ok (they didn’t shut me down when I mentioned it to them), I hope banks are somewhat flexible on this point!

[Deleted User]

I cant imagine the lender will care as long as you meet the 2nd home criteria and confirm the HA have given you permission

kd89

You need approval from Homes England or GLA if you are based in London and endorsement by the housing association. There are previous cases now that this has been granted so you should be OK.