How to staircase in shared ownership 

What Is Staircasing? 

A Shared Ownership home is one where a buyer has purchased a share of a property rather than buying the whole property outright. The share purchased is usually between 25% and 75% and then rent is paid monthly on the remaining share of the property. Staircasing is the process of purchasing further shares up to and including 100% ownership. 

Some properties have restrictions on the staircasing process, so it’s important to review the terms in your lease for any limitations.

Shared Ownership Staircasing: Key Benefits 

Choosing to staircase with Shared Ownership offers a range of benefits. When you purchase a share of a property, you pay rent on the remaining share, but staircasing means you will own a bigger share of your home, reducing your monthly rent bill. While your mortgage will increase, your rental payments will decrease at the same time. Plus, when you own 100% of your home, you can benefit from a standard mortgage, which tends to be cheaper than a Shared Ownership one. 

If you ever decide to sell your property in the future, you can take full advantage of increasing house prices and have more freedom when it comes to the selling process. If you own less than 100%, your housing association will have a fixed period of time to find someone to buy your share before you can sell it yourself via an estate agent. However, if you own 100% of your property and want to sell, you can sell via an estate agent straight away.

Staircasing Rules 

Current rules around Shared Ownership depend on whether you bought your property under the original scheme or the new model. The new staircasing regulations don’t apply to current shared owners, so if you decide to purchase more shares in your house, you need to notify your housing provider that you plan to start staircasing.

There is also a 1% incremental Shared Ownership staircasing option, which allows you to purchase an additional 1% share of your home annually for the first 15 years of your lease. Although some legal fees are expected to be incurred, shared owners who choose to use the 1% staircasing option will not be obliged to pay for an independent valuation, and the fees will be significantly reduced.

Cost Breakdown: Staircasing Fees 

You will need to account for some costs on top of the purchase price of the shares you wish to buy. Budget for around £2000 plus Stamp Duty. 

• Valuation Fee: Each time you want to buy more shares, you will need to pay for a valuation report.
• Legal Fee: You will need a solicitor or conveyancer to complete the legal work.
• Stamp Duty: This will vary depending on the value of the share you are buying. Check HMRC's stamp duty calculator to work out how much you will have to pay.
• Mortgage Fee: If you are changing your mortgage, you may have to pay fees.

At the time of purchasing your Shared Ownership home, you will have the option to pay the Stamp Duty in instalments or all at once, depending on the entire market value of the property. You won't be required to pay any Stamp Duty when staircasing if you decide to make a one-time payment when you first buy your home, but if you choose to pay in stages, there will be no Stamp Duty to pay until your share reaches 80% or above. 

For more personalised visibility over costs, visit our Shared Ownership affordability calculator.

How Many Times Can I Staircase?

Shared owners were previously allowed to make three applications to buy more shares in their home, with the final application resulting in the purchase of the remaining shares. However, changes were made to this policy, and many properties will no longer have any restrictions on the number of staircasing applications that can be made.

5 Steps to Staircasing with Square Roots

1. If you’re interested in staircasing, you can gauge your home's worth using Rightmove or Zoopla. The cost of additional shares is based on your home's market value at that time. Once you have an estimate, you can decide whether you are happy to proceed. 
2. Make sure you have accounted for the additional costs involved, such as a valuation fee and solicitor fees. However, these shouldn't be as much as when you bought your first share.
3. You should notify us at [email protected] of your intention to staircase, where we will put you in touch with our sales team to talk you through the next steps. You'll need to instruct an independent RICS-qualified valuer (we can help recommend one from our experienced panel of surveyors) and speak to a financial advisor about what you can afford. Square Roots will need to approve the valuation before you can proceed.
4. Once approved, you will need to take a full financial assessment, appoint your solicitor and make your mortgage application.
5. Once your solicitor has completed all legal work, you will have successfully increased your share in your home! 

Shared Ownership How to Staircase Your Home – Summary

In summary, the following steps should be taken if you wish to increase your ownership of your shared ownership property:

1. Checking your lease for what’s involved.
2. Contacting your housing provider for details on process and timings.
3. Getting an early idea of total costs before you commit to spending money on formal valuations and remortgaging.
4. Deciding whether buying more shares is affordable and right for you now and in the longer term.

Discover Square Roots shared ownership homes to start your staircasing journey today!