Staircasing means buying more shares in your home until, if you want, you own all of it. It is a great feeling when you get there, but it has its own process and costs, so it is worth understanding before you start.
How staircasing works
You buy more shares in your home at the value of the home at the time you buy them, not what you paid originally. If your home has gone up in value, each extra percentage costs more. If it has gone down, it costs less.
How much you can buy at a time
On older leases you can usually buy shares of 10% or more at a time. On newer leases the minimum is often 5%, and you can also use gradual staircasing to buy 1% a year for the first 15 years, at a lower cost.
The staircasing process
Tell your landlord you want to buy more, get a valuation report from a surveyor they accept, arrange your mortgage, then your solicitor completes the legal work. The valuation report usually lasts three months, so line up your funding first.
The costs involved
Expect to pay for the valuation report, your legal fees, an administration fee from your housing provider and any mortgage fees. You may also have to pay stamp duty if your share goes above 80% and you did not pay it on the full value when you bought.
How to pay for more shares
Most people use savings, a further advance from their current mortgage lender, or a remortgage to a new lender that releases equity. We compare all three and work out which leaves you best off each month.
Your rent and mortgage payments after
Each time you staircase, your rent falls because you own more of the home, and your mortgage payments go up if you borrow to fund it. We show you the before and after figures so you know exactly what changes.
Downward staircasing
Some newer leases let you sell part of your share back to the landlord if you hit serious financial trouble, known as downward staircasing. It is only allowed in exceptional circumstances and as a last resort, so check your lease.
Reaching 100%
Once you own 100% you stop paying rent. If you own a house, the freehold is usually transferred to you. Flats stay leasehold, so you keep paying the service charge, but the shared ownership restrictions fall away.
Get advice before you pay for a valuation
Speak to a mortgage broker or financial adviser before you instruct the surveyor. Knowing what you can borrow first means you buy the right percentage share and do not waste a valuation that runs out before your mortgage is ready.
We are fee free on over 90% of cases. Many shared ownership mortgages are under £100,000, where a £299 fee applies, and complex or adverse cases can carry a fee of up to £995. Remortgages are always fee free, and we always tell you about any fee before we start.
Your home may be repossessed if you do not keep up repayments on your mortgage.
