What is Staircasing a Shared Ownership Property?

A shared ownership home is one where a buyer has purchased a share of the property rather than the whole property. Initially purchasing between 25% and 75%, then paying rent on the value of the remaining share of the property. Staircasing is the process of purchasing further shares up to and including 100% ownership. 

Some properties are subject to restrictions to the staircasing process so it’s important to check the terms in your lease in case there are any limitations.

• Pay less rent. Shared ownership staircasing means you will own a bigger share if your home – this will reduce your monthly rent bill. While your mortgage will increase, your rental payments will decrease at the same time.
• Benefit from increasing house prices. The more of your home you own the more you’ll benefit if its value increases.
• Mortgage choice. Using staircasing shared ownership to own 100% of your home means you’ll be able to get a standard mortgage, rather than a shared ownership mortgage as standard mortgages tend to be cheaper.
• Freedom when selling. 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.

This depends on whether you bought under the original shared ownership scheme or the new shared ownership model.

The new staircasing regulations do not apply to current shared owners, therefore if you decide to purchase more shares in your house, you must first notify your housing provider that you plan to staircase.

When purchasing a home under the new model, you will have the option to staircase by 1% each year for 15 years from the date of purchase. 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. For more information on this view our staircasing guide.

You will need to account for several costs on top of the purchase price of the shares you wish to buy – roughly allow 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 works.
• Stamp Duty – This will vary depending on the value of the share you are buying. Check HMRCs 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. However, if you chose to pay in stages, there will be no Stamp Duty to pay until your share reaches 80% and above. 

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.