When you buy a home through Shared Ownership, you may have the option to buy more shares when you can afford to, known as ‘staircasing’. A lot of the time people aren’t aware of the process of staircasing as they may not think about it until they are ready to purchase more shares, so we put together this blog to explain the process.
Step 1 – Can you afford to buy more shares?
Firstly, you will need to know whether you can afford to buy more shares in your home and how much more equity you want to purchase. We would always recommend you speak to either a financial advisor at this point or your lender to complete an affordability assessment which will tell you whether you are in a position to staircase or not.
Step 2 – Valuing your home
When you staircase you need to have a valuation done on your home as this will determine the cost of the share you purchase.
This will need to be done by a Royal Institute of Chartered Surveyors (RICS) valuer. At this point it is worth getting in touch with the Housing Association that owns the remaining share on your property as they may be able to help arrange the valuation on your home and walk you through the process. Please note that they may charge for this service.
Step 3 – Your staircasing options
Once you know how much your property is worth, your lender or financial advisor can calculate the share percentage you can staircase to.
As with any purchase there are mortgage and legal fees involved with staircasing so it’s worth bearing this in mind. You may want to wait until you can afford a bigger share, for example, to keep the fees to a minimum.
You should also be aware that some homes have restricted staircasing which means you can’t always buy 100% of the home. You will have been informed if this applies to you when you bought your home.
Step 4 – Instructing your solicitor
Again, as with any purchase you will need to instruct a solicitor when you buy more shares in your home. You may wish to use the solicitor who dealt with your original purchase as they will have easier access to details about your property, or you may wish to instruct a new solicitor – it’s up to you!
It’s always worth choosing a solicitor that has knowledge of Shared Ownership and Shared Ownership Leases. Help to Buy North West has a list of recommended solicitors which you can view here: Shared Ownership Solicitors.
Step 5 – Send the details to your Housing Association
Once you have instructed your Solicitor you will need to let your Housing Association know so they can write to them. They will need to know the name of your solicitor, the share you are purchasing and the name of your lender.
They will then liaise with your solicitor on the purchase of your new share, which will be a similar process to when you bought your original share.
Once the legal paper work has been completed and the funds are ready, your solicitor will arrange a date for you to complete the purchase of your new share. Once this is done, your Housing Association will adjust your rent account accordingly (you will now pay less rent as you own more of your home) and that’s it – you have successfully staircased!
Things to remember
- You will need to arrange a valuation each time you staircase and pay for this cost yourself
- Your lender may charge you a mortgage arrangement fee
- If you’re coming out of your mortgage early, there may be an early repayment charge
- You will have to pay legal fees to your solicitor – always ask what these are upfront so you’re not hit with an unexpected bill
- You may have to pay stamp duty – your solicitor will advise you of this
Staircasing may seem a bit daunting but most Shared Owners find the process fairly straight-forward.