As a shared owner you can buy further shares in your home, until you own 100%. There may however be some restrictions which if so, will be explained by your solicitors.
Buying further shares is called 'Staircasing'. The price you pay for additional shares will be based on the current market value of your home, as determined by an Independent Valuer. Our aim is to help you into home ownership and to make this as affordable and accessible as possible. Staircasing is simple and we will guide you step-by-step through the process.
If you are thinking about buying a further share in your home, just get in touch with us.
We always recommend you seek advice from an independent Financial Advisor who has experience of shared ownership. You should make sure you are able to borrow more money and can afford the increased mortgage payments before you start this process.
Before we can consider your request, there must be no rent arrears on your account.
The benefits of staircasing:
- You own more of your home, so your investment is greater.
- The higher the share you own, the lower your rent will be.
- When you staircase to 100% ownership, you will have no rent to pay at all (there may still be a ground rent and service charges to pay in the case of flats or apartments).
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.
You will need to let us know of any improvements you have made so they can be taken into account when valuing your home for staircasing.
Any improvements made to the home may increase the market value and we will consider these to ensure you do not pay for the increase. The valuer will 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.
On completion of your purchase, the rent you pay will be reduced accordingly.
Once we have received your request to buy further shares, we will arrange an independent valuations of your home within 14 days. We will let you know the valuation within five working days of us receiving the report. You will then need to let us know which solicitor you will be using.
Valuations remain valid for three months from the date of the report, and you will need to complete the purchase 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 to you.
You may find that the value of your home has increased (in a strong market) which will mean the price you pay will increase.
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 final 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 also be other lending charges depending on what sort of mortgage deal you select.
Please note these costs are still payable if solicitors are instructed and you do not proceed for any reason.
This depends on the option you chose when you bought the initial share of your home. Your solicitors will have given you advice on this. For further information on Stamp Duty Land Tax call their enquiry line on: 0300 200 3510 or visit: www.hmrc.gov.uk
If you are thinking of buying further shares in your home and would like to discuss staircasing in more detail call our sales team on: 01733 396406 or email: email@example.com
For a pdf version of this information please see our Staircasing leaflet.