Buying more shares in your shared ownership home is called ‘staircasing’ and most leases allow you to do this to a point where you can own your home outright. The price you pay for the additional shares is based on the current market value of your home.
1) What share can I buy in my home?
You may staircase in separate stages or in one stage to 100%. The minimum share you can buy is 10%. In a few cases, a lease may limit the share of your home you may buy (this usually applies in rural locations).
2) How is the value of the property determined?
Under the terms of the shared ownership lease in order to determine the value at staircasing, the Landlord will instruct an independent RICS (Royal Institute of Chartered Surveyors) / FRICS (Fellow of Royal Institute of Chartered Surveyors to carry out an up to date independent market valuation. The leaseholder is responsible for the cost of the valuation report.
3) What if I do not agree with the Valuation?
Under the terms of the shared ownership lease the valuation is final and binding for both the Leaseholder and Housing Association.
4) How is the purchase price of the share calculated?
The additional share you buy is calculated at the open market valuation of the property. Therefore, if your property is valued at £300,000 and you wish to purchase an additional 25% share, the purchase price would be £75,000. If your home increases in value you purchase additional shares at the higher value, if it had decreased in value you purchase additional shares at the lower value.
5) What if I have made improvements to the property?
Any significant improvements you have made to the property should be listed by the Surveyor and two values will be provided, one that takes the improvements into consideration and one that does not. The value without the improvements will determine the cost of the additional share you buy.
The Surveyor will consider the added value that the improvements bring to your property and not the actual cost of the works.
6) What improvements will be considered at staircasing?
General maintenance, repairs and redecoration would not be considered an improvement at staircasing.
Improvements such as new windows, fitted kitchen/bathroom, installing central heating, loft conversions and conservatories would be reflected in a staircasing valuation.
7) How many times can I staircase?
Most shared ownership leases allow staircasing a maximum of three times.
8) What are the costs of staircasing?
Housing Associations may have slightly different charges during staircasing sales but you may be liable for the following charges.
Staircasing administration fee
Your solicitors fees
Mortagage arrangement fee (if applicable)
Leasehold enquiry fee
Stamp Duty (if applicable)
9) How long does a staircasing sale take to complete?
It is anticipated that a staircasing sale will be complete within three months. This is the period that the valuation remains valid. If the sale does not take place within a three month period a new desk top valuation will be required to confirm that the value of the property has not changed.
10) Will I still be liable to pay the Housing Association for my buildings insurance after completion?
If you purchase the whole 100% of your home and your property is a house, you will need to arrange your own buildings insurance cover to commence from the date of completion. If you have purchased 100% of a flat, it is possible that you will continue to pay your monthly buildings insurance to the Housing Association. Alternatively, you may have to pay it to a Managing Agent.