Help to Buy South West

Wednesday, 28-Jun-2017
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Staircasing

Buying more shares in your home

What is Staircasing?

Staircasing is the term given to buying extra shares in your shared ownership property.

How does Staircasing work?

Most leases allow you to buy extra shares in your home after you have made your initial purchase.  You can choose to go up another step on the home ownership ladder by buying further shares, or you can, in most cases, choose to purchase all the remaining shares. In some cases it is not possible to staircase to 100%, this may be restricted to 80%. Your Housing Association will be able to advise you if this restriction is in place.

If you are a shared owner thinking of staircasing, you are advised to contact your mortgage lender to find out about further borrowing. 

How much would further shares cost?

Shares are sold at the current market value, disregarding any improvements to your home that your landlord has consented to.  The assessment of the current market value is made by a RICS qualified valuer.   We have a panel of approved valuers on our website and your landlord will probably also have one.  Check with your own landlord first to make sure you get the best deal.   An estate agents valuation is not acceptable, nor is a valuation provided by your mortgage lender. 

What do I do once I have received the valuation?

Once your landlord has sent a copy of the valuation, they will advise you of the cost of buying extra shares.  If you wish to progress then you will need to instruct a solicitor to act for you, and ensure the details are passed to your landlord. 

What happens about the rent payments?

If you partially staircase then your rent will reduce in accordance with the extra shares you have purchased and it will remain leasehold.   However if you are buying 100%, it will depend on the type of property and what is in the lease as to whether it will become freehold.  If you are in a house it is likely to become freehold.  If you are in a flat or apartment it is likely to remain leasehold.

Where can I get further help and advice?

We have a panel of Solicitors, Independent Financial Advisers and Surveyors on our website.  They will be pleased to give you help and advice.   You can also contact your current landlord for further information.

I have purchased through the Help to Buy Equity Loan scheme, how can I staircase on my property?

You can choose to make part repayments (called staircasing) of the Help to Buy equity loan at the current market value at the time you wish to staircase.

The minimum additional repayments are 10% of the total market value. You have the option to make repayments until at a later date you own 100% of the property. 

If you sell your home and the Help to Buy equity loan is unpaid, based on the above example you would repay 20% of the full market value when the property is sold.

 

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