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Shared Ownership: Sell At 60% Or Staircase To 100%?

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Bananimus_Prime
Bananimus_Prime Posts: 2 Newbie
First Anniversary
in House buying, renting & selling
Hello everyone,

My fiancee and I started Shared Ownership on our flat 4 years ago with a 25% share, and have since staircased to 60%. We are considering our next steps, whether we should sell at 60%, or staircase to 100% and then sell a year or so later.

As we are a flat my understanding is that we cannot purchase the freehold, although I know next to nothing about these sorts of things!

If we were to staircase to 100%, are there any unexpected costs (both upfront and monthly) that I might not have thought of?

If we were to sell at 60%, would we be in for a rough ride? Is it typically a much slower process, as the housing association get first dibs?

Thank you for any advice anyone can offer on which would be the best route to take!

Comments

  • laura_d
    laura_d Posts: 39 Forumite
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    I'm in a reasonably similar boat...


    In terms of costs to staircase, you would probably be looking at Stamp Duty as you'll be going over that 80% ownership threshold (unless you paid duty on the whole thing at the outset), plus the usual costs like valuation, legals, mortgage product fees etc.


    As you've said, selling at 60% would mean that the HA has first dibs. The problem with that is, in the case of my HA, they have a tendency to value resale properties lower than what might be achieved on the open market. By way of example, one of my neighbours is selling his 2 bed flat (100%) for £400k. The HA are selling 40% of an almost identical flat in the same block (exactly the same, except for being on a different floor) at a full value of £350,000. I'm eagerly monitoring it to see if it sells or moves to open market, so that I have an idea of resale appetite.



    I don't know how much appetite HA resales get, but obviously if someone snaps it up, thats 40% of £50k less profit!


    It may be that you could get multiple valuations in order to argue the toss on what the HA values it at, but I'm sure there are more experienced SO people around here who could give more info!
  • Bananimus_Prime
    Bananimus_Prime Posts: 2 Newbie
    First Anniversary
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    Thanks Laura,

    The lower valuation from the HA was something I was worried about, it seems like you could easily lose out on a fair chunk of money, with little/no recourse.

    It feels like if we end up being eligible to reach 100% (haven't officially checked yet), then it will be the safest option in terms of easily selling up and getting a fair sale price.
  • laura_d
    laura_d Posts: 39 Forumite
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    Thinking out loud here...


    I suppose you could start the valuation process for a sale of your 60%. If the HA are pushing for the lower end, then you could change your mind, and purchase the remaining 40% at their price.


    I don't know if that would work in practice...
  • jonnygee2
    jonnygee2 Posts: 2,086 Forumite
    Name Dropper First Post Combo Breaker First Anniversary
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    By way of example, one of my neighbours is selling his 2 bed flat (100%) for £400k. The HA are selling 40% of an almost identical flat in the same block (exactly the same, except for being on a different floor) at a full value of £350,000.

    That's a pretty big difference. It would be interesting to know the result.

    If the HA are selling at £350,000 then that's what a professional valuer has valued it at. The other guy is probably selling off an EA's estimate / his own self esteem. My money is on the HAs price!
  • rachael88
    rachael88 Posts: 53 Forumite
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    I've just sold (completing in November) my 50% share of a house and I had to get an independent valuation and couldn't sell for more than that price but I had 2 offers within 2 days of it going on the market. According to everyone I've spoken to in the area shared ownership properties are in high demand and tend to sell a lot quicker.
    Maybe ask a local estate agent?
  • Jigglebiz
    Jigglebiz Posts: 162 Forumite
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    Personally I would say it’s better to staircase to 100%. We bought a shared ownership property at 40%, vendor had a nightmare trying to market it and was desperate by the time he sold to us.
    Now we are selling it since having staircased to 100% and the conveyancing transaction is much quicker - this is a major plus for buyers. We could price it as we liked and take offers.
    Total debt outstanding: Jan18 -£1813 / Feb18 -£1649 / Mar18 -£1278 / Apr18 -£999 / May18 -£632 / June18 -£316 / July18 £0
     House Buy/Sell Fund: Jan18 £0 / Feb18 £184 / Mar18 £568 / Apr18 £936 / May18 £956 / June18 £1538 / Jul18 £2233 / Aug18 £2719
  • laura_d
    laura_d Posts: 39 Forumite
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    jonnygee2 wrote: »
    That's a pretty big difference. It would be interesting to know the result.

    If the HA are selling at £350,000 then that's what a professional valuer has valued it at. The other guy is probably selling off an EA's estimate / his own self esteem. My money is on the HAs price!


    Incidentally, two other properties have been sold in the block within the last 6 months at the £400k mark, so I guess the current guy is doing it off the back of that.


    Not sure if this is standard SO practice, but when reselling a share, the valuation is based on the 'shell' only, and is not to take into account any improvements you may have made to the property internally. I guess selling 100% on the open market doesn't have the same valuation restrictions.
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