Shared Ownership staircasing what would you do?

[MyDucksArentInARow]

I've name changed, not for this thread but just used my old one a bit too much.

I'm a 50% shared owner. I am now in a position where I could buy the other 50% if we can mortgage the rest. If we did, we'd have a LTV of 90%. There a chance we couldn't get that with our current provider due to their rebuild restrictions. I've heard of people have 2 separate mortgages - has anyone done this? If you did, what did you do about deposit or did you get a 100% ltv for the 2nd mortgage?

But on that note I don't know whether to buy or not! We are going to live hear for a minimum of 12 months after we would buy 100%. Beyond that my DP is looking into different jobs as he hits a milestone. This might mean we'd have to move to a different location. Ideally at some point we want to move towards Wales to be closer to my parents, but we can delay that until the right job comes up for DP in that area (I can do my job from anywhere). If we bought, we'd have to pay valuation + legal fees of both sides + stamp duty (I reckon legal fees + valuation will be ~£1k and stamp duty will be £3k). We would stop paying £400pcm in rent, obviously increased mortgage but that's also equity so a benefit of buying. Given the cost of £4k to buy, excluding any deposits for 2nd half of mortgage, that's equivalent to 10 months of renting. So after we've lived here for 10 months were effectively "better off" than we would have been staying at 50%. Excluding risk of value drops when we do need to sell. If we were to put it on the market at 12 months post purchase, we'll be paying a whole new set of fees, stamp duty on next house. Our alternative is to put more into overpaying our current mortgage, we can afford about another £200-300pcm. This would increase our equity without spending more on fees but we would be spending on rent still.

The house also needs work and we'll be making it our home - just not spending as much as we would other wise. If we add value, but staircase, they don't include value add to our sale price. If we don't stair case, we have to split any value add 50/50 with the housing association. If we bought outright we'd do more to the house, like nicer bathrooms to our taste, new carpets etc.

Would you even buy outright if you were in my position? It's not our forever home, even if we stay in the area.

We just bought our 50%

No need for a deposit because had a tiny bit of equity. You pay SD on the 2nd half, not the whole lot (I'd budgeted 1.6k but the bill was actually half for SD.)
Because we bought our 1st half 5 years ago, the 2nd half bought now was obviously valued at an increased price, meaning we paid less than next door who just bought due to buying in two stages as obviously the house was cheaper when we first bought.

Our new mortgage provider handled our legals for a massively reduced rate too.

We decided it was still better to buy this and later sell if we wanted to.

Thank you Sneezer - I take it you stuck with the same provider for both halves? I've got to thoroughly check our lender but the criteria on their intermediaries website says that they only do a 90% LTV on shared ownership (having to wait until the exact moment of 2yrs since house built anyway so it's not classed as a "new build" in their eyes otherwise we'll be caught out by the 85% LTV cap) If it's 90% we'll be on a very tight line, especially if its gone up in value for 2nd half - we're looking at needing to source about £14k for the scenario it hasn't changed - hopefully there's been a small drop we can capitalize on (maybe if I get the valuation done right in the middle of our redecoration with no floors, and a leaky bathroom )

I'll rebudget for stamp duty after we've had the place revalued, we just benefited from the change in FTB stampduty refunds on shared ownership so not sure how much we'll pay.

Just trying to work out if its worth getting the ball rolling or not, everything could align nicely at the 2 year mark

Do you get the freehold or will it remain leasehold?

We will automatically get Freehold

We went with a new provider, had been with nationwide, 2 year fixed ended and then we found a new lender so we have just one mortgage. We also took 7k for our bathroom.

Its been a very positive experience.

In a very similar situation to you Sneezer! Did you get still classed as shared ownership in terms of lending rates? That's what I'm reading in nationwides paper work, even on final stair case to 100% hence the cap at 90% ltv. If we can get a 95% ltv then we'd be set! We're coming up to the end of our 2 year soon which is why I'm crunching the numbers now!

Yes i believe so... but it was further complicated by us having a ltd company etc so we aren't with a high street lender and are riding out a 2 year high rate and hoping we can get a better deal when it runs out!

Honestly, a really good broker is what you need to make this happen.

I think next time around, the fact it was originally SO will be irrelevant

Thank you!! Now to save hard for a few months and hunt for a broker! Fingers crossed!!!