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 full ownership.
Once you become the full owner - if the property is a house and the previous owner is a housing association - the freehold or the leasehold interest will be transferred to you.
If the property is an apartment, the property remains a leasehold. 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. Subject to the terms of the lease or transfer, service charges may remain payable.
The amount that you pay - similar to interim staircasing - is based on the market value of the property which is determined by the valuation.