If you live in a shared ownership home, you might have considered buying additional shares in your property. This process is known as staircasing.
What is staircasing?
Staircasing is when you purchase more shares of your shared ownership property, gradually increasing your ownership percentage. As outlined in your lease, you have the option to buy further shares, which means:
- Greater ownership: You own a larger portion of your home.
- Lower rent: You pay less rent on the shares you don’t own.
- Full ownership potential: Most shared ownership properties allow you to eventually staircase to 100%, becoming the sole owner.
To find out if your property allows full staircasing, check your lease or speak with your landlord.
Benefits of staircasing
When you staircase to 100% ownership, you’ll no longer pay rent. You will still need to cover your mortgage, but securing a standard mortgage rate may become easier, compared to a shared ownership mortgage.
How Does Staircasing Work?
Let’s say you initially bought a 30% share of your home. Later, you decide to buy an additional 20%. You would then own 50% of your property.
- Interim staircasing: This refers to any partial share purchases (e.g., going from 30% to 50%).
- Final staircasing: If you staircase to 100%, you become the sole owner.
Are there any restrictions?
Some properties have restrictions on staircasing due to planning permissions. This is often to ensure homes remain available for local people rather than becoming second homes. Check your lease or consult your landlord to understand any limitations.
Do you have to staircase?
No, staircasing is completely optional. It’s a great choice if your financial situation improves and you want to invest more in your home. However, it’s not a requirement.
Costs to consider
Staircasing does come with additional costs, including:
- Property valuation: A surveyor will determine your home’s current market value.
- Legal fees: You’ll need a solicitor to handle the legal process.
- Stamp duty: Depending on how much you staircase, you may need to pay Stamp Duty.
Financing your staircasing
If you don’t have sufficient savings, you can consider remortgaging to release funds and extend your mortgage term. Many lenders offer options to help finance additional share purchases.
Final thoughts
Staircasing can be a great way to increase your property ownership and reduce rent payments. To explore your options further, review your lease, speak to your landlord, and seek professional financial and legal advice.
If you have any questions, contact our conveyancing team today.
