Staircasing means increasing your ownership of the shared ownership property – usually through buying extra shares, normally from a Housing Association or other social landlord, in a property which was originally bought through a shared ownership scheme. Depending on your Housing Association, you may be able to buy shares in as small a chunk as just 10% or 20% at a time [ although buying such small further shares does have costs implications – see below].
The leases of most shared ownership properties contain a clause which gives the tenant the right to keep buying extra shares until they finally own 100% of the lease.
Tenants who own less than 100% still have to keep paying rent for the percentage of the property which they do not own. As more and more shares are bought, the proportion of the property owned by the Housing Association decreases, and the rent also decreases.
Using staircasing is an easy way of eventually owning a property without the need to invest a large sum of money all at once.
How our Panel Recommended Solicitors can help you
Our property team have plenty of experience of staircasing. We are on the recommended solicitors panel for Radian Homes. We also regularly act for clients in property transaction in a wide range of housing associations including Sovereign, Aster and VIVID (formed from a merger of First Wessex and Sentinel Housing Association).
What’s more highly experienced property team handle staircasisng and shared ownership conveyancing not just locally in Wiltshire, Hampshire and Dorset, but for clients throughout England and Wales – from our four offices in Salisbury, Fordingbridge, Andover and Amesbury.
Need help with staircasing? Call our specialist solicitors on FREEPHONE 0800 1404544 for FREE initial phone advice – with no strings attached.
Do I Have an Automatic Staircasing Right?
Not necessarily. Some leases restrict your right to buy a 100% interest in your property.
It is crucial to check whether your particular lease actually has an automatic staircasing clause or not. You could have a look at your lease – or alternatively check it with the Housing Association. A solicitor who specialises in shared ownership properties will be able to help you with this.
The act of buying the final share which takes ownership to the full 100% is called final staircasing. It is usually possible to staircase up to 100% ownership [though you will need to check your lease to see if your is one of the relatively small number of shared ownership properties, where 100% ownership is not permitted].
When you take the final step of buying the last shares and increase your ownership to 100% ,the Housing Association stops having any financial interest in your property and you and you no longer have to pay them rent. You are now the sole owner of your property, subject to your mortgage arrangements.
However if your property is a flat, despite final staircasing, you will still need to pay ground rent, service charges and property insurance – like any other flat owner.
If the property which you have bought through staircasing is a house, then when you make the final payment you become the freehold owner. If it is a flat, you will still be a leaseholder even though you have paid off the shared ownership part of the lease.
Can I Staircase in Stages?
Again it depends on what your particular lease says, but most housing association shared ownership leases allow you to “staircase” as often as you want, gradually increasing your share in the property and reducing your rent.
There are however financial costs involved with each staircasing transaction. It could work out cheaper to buy the remaining share in your property in as few chunks as possible – instead of staircasing regularly.
Staircasing – how to pay for it
If you are thinking about staircasing, you will have to find a lender or mortgage provider who will give you another mortgage, unless you have readily available cash. The funds which are available to you will help determine the number of shares which you are able to buy. If you are thinking about switching mortgage companies, check first about whether any redemption penalties apply. A good independent financial advisor, should be able to help you with these issues.
Staircasing – How We Can Help
The staircasing process is even more complex than buying into shared ownership in the first place.
That’s why you need a specialist solicitor with plenty of experience of buying property from housing associations and staircasing. You can rest assured our team have that experience.
The staircasing process includes liaising with the Housing Association, dealing with the mortgage lenders, arranging for the property to be valued and preparation of the Memorandum of Staircasing. All of this can be made a lot more straightforward with the help of one of our expert team.
Costs involved in staircasing
Don’t forget the following additional costs in addition to the cost of actually buying an additional share your property;
· Your Housing Association’s administration fee
· The Surveyor’s fees – who give you the full current market valuation of your property – and which is called a “staircasing valuation”
· Your own legal costs
Depending on your particular circumstances, you may also have to pay Stamp Duty Land Tax – which is a tax on land transactions