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How To Buy More Shares In Your Shared Ownership Home

Posted 28 December 2022 by Helen Christie

The WhatHouse? team has put together a guide to tell you all you need to know about increasing your share of a Shared Ownership home...

If you are the owner of a Shared Ownership property and are looking to purchase further shares including up to outright ownership, it is known as the process of "Staircasing".

Buying further shares of your home is called 'staircasing' and you can do this to increase the proportion of your home that you own, and reduce the rent that you are paying. The greater the percentage of ownership then the more profit you will make when you sell your home, if the value of the property has increased.

How does the staircasing process work?

If you decide you want to increase your share in your home you should normally contact the 'landlord'. In the case of Shared Ownership, this is the housing association. You should also speak to a mortgage broker or to your lender about borrowing the money that you need to buy the additional share. There are normally two ways of raising the funds to buy an additional share in your home, a further advance or remortgaging:

  • A further advance - Your existing mortgage lender may be able to advance the money you need to staircase. They will need to value your home to establish that there is sufficient equity and you will normally have to pay the valuation fee. They are likely to want to see proof of your earnings in order to conduct an affordability assessment and to ensure that you can meet your total repayments. They may also offer you a fixed- or variable-rate deal on the further advance.
  • Remortgage - If you need to borrow extra money to fund the staircasing you may want to consider moving your mortgage to another lender. A remortgage allows you apply for a larger loan with a new lender, meaning you can repay the mortgage to your existing lender and have enough cash to pay for the additional share.

Many lenders have very good fixed- and variable-rate deals for remortgage borrowers. Some even offer a 'remortgage package' where they will meet the valuation and legal fees involved in the remortgage.

How is the cost of the shares determined?

Once you have contacted your housing provider requesting an application to staircase, you will have to obtain a valuation of your property. This will determine the price of the extra shares you are buying.

In most cases, you will need to have a valuation of your property carried out by a Royal Institution of Chartered Surveyors (RICS) accredited surveyor. Many housing associations have a list of firms they can give you to choose from.

How do you find a qualified surveyor?

A new valuation of your property should be carried out by a surveyor who is qualified. This means someone who is a member of the Royal Institute of Chartered Surveyors. This is important or else the valuation will be void. To find a qualified surveyor, your housing association may have a list of suitable valuers or else you can find one by clicking here. Once you have your chosen surveyor, contact your housing association to verify this is someone who is agreeable to them.

You should ask that the surveyor disregards any increase in the valuation of your property as a result of any home improvements you may have carried out. This is so you do not have to pay for the added value of any improvements that you have already paid for.

What additional costs are involved in the staircasing process?

There are a number of costs involved in the staircasing mortgage process, which the shared owner is expected to meet.

You must cover the cost of having the property surveyed and there will be the usual conveyancing expenses from your solicitor, plus any additional legal or mortgage fees. Your valuation will last for three months, so you must complete the staircasing process within that time, or you will need to have the survey carried out again.

When you purchase your Shared Ownership home, you can either choose to make a  one-off Stamp Duty payment which is based on the total market value of the property, or you can choose to pay the Stamp Duty in stages, paying the amount on the initial share you buy and then again for any additional shares you purchase once your owned share reached 80% and above.

Upon completion, you will pay any arrears of rent and any other sums due to your housing provider under the lease agreement.

How many times you are allowed to staircase?

Previously owners were allowed to staircase up to three times (with the third application taking you to full ownership) but now many properties no longer have restrictions on the number of times you can staircase, though this does vary from provider to provider so be sure to check this in your lease.

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