Staircasing
As a leaseholder of a shared ownership property bought either new or as a resale, you can buy more shares in your property. This process is known as staircasing, enabling you to own a greater proportion of your home. The greater the share you buy in your home, the less rent you pay to us. If you staircase to 100% you become an outright owner and pay no rent (but you will have to start paying ground rent).
As a leaseholder of a shared ownership property bought either new or as a resale, you can buy more shares in your property. This process is known as staircasing, enabling you to own a greater proportion of your home. The greater the share you buy in your home, the less rent you pay to us. If you staircase to 100% you become an outright owner and pay no rent (but you will have to start paying ground rent).
What is staircasing?
Usually once you have lived in your home for a certain period of time as the shared owner (depending on the terms of your lease), you can buy further shares in your property. This process is known as staircasing, enabling you to own a greater proportion of your home. If you bought a resale property you can buy further shares too (depending on the terms of your lease).
The greater the share you buy in your home the less rent you will pay to your Housing Association. If you staircase to 100% you become an outright owner, and you will no longer need to pay rent.
You may acquire additional shares in your property at a price equal to the relevant proportion of the current full open market value of the property. For example: if your property is valued at £200,000 and you want to buy an additional 25% share, the purchase price of the extra share would be 25% of the valuation, which is £50,000.
What is staircasing?
Usually once you have lived in your home for a certain period of time as the shared owner (depending on the terms of your lease), you can buy further shares in your property. This process is known as staircasing, enabling you to own a greater proportion of your home. If you bought a resale property you can buy further shares too (depending on the terms of your lease).
The greater the share you buy in your home the less rent you will pay to your Housing Association. If you staircase to 100% you become an outright owner, and you will no longer need to pay rent.
You may acquire additional shares in your property at a price equal to the relevant proportion of the current full open market value of the property. For example: if your property is valued at £200,000 and you want to buy an additional 25% share, the purchase price of the extra share would be 25% of the valuation, which is £50,000.
What are the benefits of staircasing?
Buying a greater proportion of your home has a number of benefits:
- You reduce the amount of rent you pay
- If you own your property outright (become 100% owner), you will no longer pay us rent (but you will need to start paying ground rent)
- When you decide to sell your home, the greater percentage you own, the more profit you will make if the value of your home has increased
- If you own your property outright, you can sell your property on the open market using an estate agent of your choice
- Once you own your property outright, you will no longer be bound by the shared ownership restrictions in the lease
- If you own your property outright, you can sell your home to anyone interested in buying it. You will not be restricted to buyers applying for affordable homes who meet the criteria within the lease
What are the benefits of staircasing?
Buying a greater proportion of your home has a number of benefits:
- You reduce the amount of rent you pay
- If you own your property outright (become 100% owner), you will no longer pay us rent (but you will need to start paying ground rent)
- When you decide to sell your home, the greater percentage you own, the more profit you will make if the value of your home has increased
- If you own your property outright, you can sell your property on the open market using an estate agent of your choice
- Once you own your property outright, you will no longer be bound by the shared ownership restrictions in the lease
- If you own your property outright, you can sell your home to anyone interested in buying it. You will not be restricted to buyers applying for affordable homes who meet the criteria within the lease
How much does it cost?
When you are ready to buy more of your home, the price you will need to pay for an additional ‘chunk’ will be calculated on the basis of the current value of your property.
For example, your property might have been worth £300,000 in 2019 when you bought 50% ownership of it (paying £150,000). You now want to staircase to 100%. The current value of your home has now increased to £360,000. This means that to buy the remaining 50% of your home you will need to pay £180,000 (50% of its current value), not £150,000 as previously.
Some other expenses involved in the process of staircasing include:
- valuation fee - to establish how much you will pay for the additional chunk of your home you will need to have your home valued. You can either use our own panel of valuers or choose your own valuer - provided they are RICS-qualified. We will need to approve them and we must instruct them and receive a satisfactory valuation report. Also, it is important to remember that valuation is only valid for three months. If you cannot make a purchase within this time, you will need to have the property valued again.
- legal fees - staircasing will involve changes to your existing lease, which will require the professional services of a solicitor. The solicitor will have disbursements and professional fees for acting for you.
- stamp duty
You may also be required to pay mortgage fees or pay penalty charges to your existing lender if you re-mortgage before the product end date.
Also, if you have any arrears, these must be cleared before the completion of the staircasing transaction.
How much does it cost?
When you are ready to buy more of your home, the price you will need to pay for an additional ‘chunk’ will be calculated on the basis of the current value of your property.
For example, your property might have been worth £300,000 in 2019 when you bought 50% ownership of it (paying £150,000). You now want to staircase to 100%. The current value of your home has now increased to £360,000. This means that to buy the remaining 50% of your home you will need to pay £180,000 (50% of its current value), not £150,000 as previously.
Some other expenses involved in the process of staircasing include:
- valuation fee - to establish how much you will pay for the additional chunk of your home you will need to have your home valued. You can either use our own panel of valuers or choose your own valuer - provided they are RICS-qualified. We will need to approve them and we must instruct them and receive a satisfactory valuation report. Also, it is important to remember that valuation is only valid for three months. If you cannot make a purchase within this time, you will need to have the property valued again.
- legal fees - staircasing will involve changes to your existing lease, which will require the professional services of a solicitor. The solicitor will have disbursements and professional fees for acting for you.
- stamp duty
You may also be required to pay mortgage fees or pay penalty charges to your existing lender if you re-mortgage before the product end date.
Also, if you have any arrears, these must be cleared before the completion of the staircasing transaction.
Why can't I staircase?
You may not be able to staircase for one of the following reasons:
- If you have arrears with your service charge and / or rent
- If you income doesn't meet our guidelines for responsible lending and the increased share is not affordable for you. This will be decided after assessing your current financial situation with our mortgage advisers at the financial interview
- If you cannot provide a valid mortgage offer or proof of savings with an audited flow of where the monies have come from i.e. saving account, inheritance etc.. for the additional share being purchased. This is because we need to comply with the Money Laundering Act
- If your property has restrictions on staircasing. If this applies, you will be limited to what you are able to staircase up to. Details of any restrictions can be found on the lease
- If your request to staircase is not signed by all those who originally bought the property
Why can't I staircase?
You may not be able to staircase for one of the following reasons:
- If you have arrears with your service charge and / or rent
- If you income doesn't meet our guidelines for responsible lending and the increased share is not affordable for you. This will be decided after assessing your current financial situation with our mortgage advisers at the financial interview
- If you cannot provide a valid mortgage offer or proof of savings with an audited flow of where the monies have come from i.e. saving account, inheritance etc.. for the additional share being purchased. This is because we need to comply with the Money Laundering Act
- If your property has restrictions on staircasing. If this applies, you will be limited to what you are able to staircase up to. Details of any restrictions can be found on the lease
- If your request to staircase is not signed by all those who originally bought the property