As a shared owner you are normally entitled to buy extra shares in your property. This means you can increase your level of ownership and move towards owning your property outright.
Buying further shares is called staircasing. Most shared owners have this right, but your lease will detail any restrictions that apply and you should check to see if this option is available to you.
Staircasing offers benefits such as:
- A greater investment in your home
- You will benefit from any growth in property value on the increased share you own
- The larger the share you own, the less rent you pay to Cross Keys Homes. If you staircase to 100% ownership you will have no rent to pay at all (there may still be a ground rent to pay in the case of flats and service charges may still apply, check your lease for details)
Staircasing is simple and we will guide you step-by-step through the process.
Unless your lease contains restrictions, you can usually buy additional shares in amounts as low as 5% or 12.5% at a time, check your lease. You can, of course, buy larger shares, including buying the remainder outright to give you 100% ownership. The size of the share you purchase will be based on the current market value of your home as determined by an independent valuer. This means no premium will be added and it will simply be a fair market value for your property. Our aim is to help you into home ownership and make this as affordable and accessible as possible.
Firstly you need to contact our land and property team on: 01733 385034 or email: email@example.com to let us know that you would like to consider staircasing. We will check there are no restrictions in your lease which would prevent you from doing this.
We recommend you seek advice from a financial advisor who has experience of shared ownership. You need to know that you can secure extra borrowing and can afford any increased mortgage payments before you start the process.
If your lease has no restrictions, we will then check that you are not in rent arrears. We are unable to consider a staircasing request if you are currently behind with rent or service charge payments. If you are in arrears you will need to clear these arrears before we can consider you for staircasing.
Providing you are not in arrears (or in breach of the lease) and your lease allows you to staircase, the next step will be to find out how much your property is currently worth. We will commission an independent valuer who is a member of the Royal Institute of Chartered Surveyors (RICS) to carry out a valuation on your behalf. You will be liable to cover the cost of this valuation.
You will need to inform us of any improvements you have carried out so they can be taken into account when valuing your property for staircasing.
Improvements carried out to the property may increase the market value and we will consider these to ensure you do not pay for the increase. The valuer will be asked to consider any works you have done to the property and give an opinion on how the improvements have affected the value. This amount will then be taken into account when considering the cost of the share you wish to purchase.
We will instruct a valuer within 14 days of receiving your payment to cover the cost of the valuation. We will advise you of the valuation within 14 days of receiving the valuation report.
The valuation will usually remain valid for three months from the date of the report. You will need to complete the purchase of further shares before the valuation expires. If you are unable to meet this deadline, it is likely another valuation report will have to be carried out at extra expense. You may then find the value of your home has increased (in a strong market) which will mean the price you pay will increase.
Once the valuation has been carried out you will be asked to confirm in writing, within seven days of receiving the valuation report, that you wish to stairacse and to agree the share amount you wish to purchase. You will be asked to provide details of the solicitor you will be using.
You are entitled to chose any solicitor you wish, however we hold details of solicitors who have experience of shared ownership and you may select one of those to make the process as smooth as possible.
One you have provided the details of your solicitor and confirmed in writing you wish to staircase together with the agreed value, we will instruct our solicitor. They will then start communicating with your solicitor to carry out the necessary legal paperwork.
This is normally a purely administrative process and should be relatively straight forward as you are simply increasing ownership in a property in which you already have an interest.
Once the paperwork has been drawn up your solicitor will ask your lender to provide the necessary lump sum to cover the cost of the share you are purchasing.
If you are staircasing using your own funds these will need to be transferred to your solicitor. A date will then be set for completion of the purchase and your solicitor will transfer the funds to us. As soon as the funds have been received your solicitor will notify you that the transaction is complete.
On completion of your purchase the rent will be reduced by the percentage equivalent to the larger share you have bought. If you have bought all the shares you will have no rent to pay, subject to lease.
There are a number of likely costs involved in staircasing. These include:
- A fee for the initial valuation carried out to determine the cost of further shares - approximately £150
- Our solicitor's costs - approximately £360 for each step up to the inal step and approximatley £600 plus VAT on final step reaching 100%
- Your solicitor's costs
- Your lender may also ask for a valuation fee if you are borrowing from a bank or building society to fund the extra share purchase. There could be other lending charges depending on what sort of mortgage deal you select
If you would like to discuss staircasing in more detail contact our land and property team on: 01733 385034 or email: firstname.lastname@example.org
For a pdf version of this information please see our guide to staircasing.