Staircasing, explained.
Buying more of your home has never been easier, here's the process explained.
Through the staircasing process you can buy a higher share in your home and pay less rent.
Staircasing is where the part-owner of a Shared Ownership property decides to purchase further shares of that property from a housing association.
As you buy more shares, you start paying less rent on the remaining share that we own.
Remember that each instance of staircasing comes with its own valuation and legal fees, meaning it’s generally advised for buyers to purchase the largest share they can afford at the time.
There are generally two forms of staircasing for buyers - interim staircasing and final staircasing.
*Staircasing to 100% will depend on the terms of your lease.
What is Interim Staircasing?
Interim staircasing is the process of purchasing property shares that increases the amount owned by the buyer, excluding achieving 100% ownership. For example, staircasing from 25% to 50% ownership. After an instance of interim staircasing, the buyer remains a shared owner.
Prior to an instance of interim staircasing, a valuation is carried out and the value of the share is based on the valuation. Once the share is purchased, there is a simultaneous reduction in the amount of rent that the shared owner pays to the housing association, since you only pay rent on the share you don’t own.
This is the most common form of staircasing and you can build up your overall percentage of ownership as much or as little as you want.
What is Final Staircasing?
Final staircasing is the process of buying the final segment of shares that takes you to 100% ownership.
Once you become the full owner - if the property is a house and the previous owner is a housing association - the freehold is transferred to you.
If the property is an apartment, the property remains a leasehold which means the service charges remain payable. The payable rent, however, is still reduced to zero. Certain elements of the lease also change to ensure it’s no longer considered a Shared Ownership lease.
The amount that you pay - similar to interim staircasing - is based on the market value of the property which is determined by the valuation.
Want to know more about Staircasing?
Find out everything you need to know about buying more of your home in our latest guide.
Download Staircasing GuideHow do I pay for staircasing?
A shared owner can purchase an additional share with either savings or through the use of a mortgage.
If you pay for the share with a mortgage, this may be an advance from your mortgage lender or a new loan through the remortgage process with another lender.
In interim staircasing, the association has to approve the mortgage offer and the amount you borrow can’t be more than the amount you’re paying for the additional share.
In the case of final staircasing, the mortgage does not have to be approved by the housing association and there’s no limit on the amount you can borrow.
Frequently Asked Staircasing Questions
Owning a larger share of your home – or even owning all of it – comes with many benefits:
The more shares you own the more equity you have in your home, which means more profit for you when you come to sell your home in the future
- You’ll reduce the amount of rent you pay to Platform Housing Group
- Becoming the outright owner means you can maximise the profit from any major home improvements you carry out if you choose to sell
You can usually buy additional shares up to 100% of the value of your home. Some of our homes in rural areas or specifically for older people are restricted so you can only buy up to 75% or 80% of the property. This is to help keep sufficient affordable housing in the area. You can buy more shares at any time, as long as you are up to date with your rent and any service charges, and can afford the increased mortgage payments.
How long will staircasing take?
Buying more shares in your home should take approximately 3 months. By providing all the relevant information required throughout you can help the process run smoothly in conjunction with your solicitors.
The cost of the shares you wish to purchase will be based on the market value of your home at the time. A valuation must be provided by an independent, RICS qualified surveyor.
It’s important to know that your home may have gone up or down in value from when you originally bought it. If you have made any structural improvements to your home which have increased its value, the valuer will take these into account. We also recommend that you seek advice from your mortgage lender or an independent financial adviser.
You will also need to budget for the costs involved in the purchase process, which include:
- RICS valuation fee
- Solicitors fees
- Mortgage administration fees
When you have completed the purchase, your rent will reduce, but other costs may increase that you need to budget for:
- Additional mortgage payments
- Buildings insurance (if you staircase to 100%)
You will also still have to pay:
- Service charges for any communal facilities
- Contents insurance
- Council Tax
Yes, it’s important that all property transactions are handled professionally by a solicitor. If you need help finding a solicitor, please let us know. Once you’ve instructed a solicitor to work with you, you’ll need to give us their details. We will also instruct solicitors to act on our behalf, and together they will work through the legal process and agree a completion date.