Climbing the property ladder: What is staircasing?
Shared ownership doesn’t stop after you’ve purchased the first share (usually between 25-75 per cent) of your new home. Over time you might want to buy more shares, a process known as ‘staircasing’, which allows you to ultimately work towards 100 per cent ownership.
When can I do it?
Your lease will tell you when you are first able to buy more shares in your home, although it is usually after one or two years.
What share can I buy?
The smallest extra share you can buy is 10% more than this must be in multiples of five per cent. You can keep purchasing shares right up until you reach 90% ownership. After that, you’ll need to purchase the remaining 10%in one go, so that you own 100%of the home.
What do I need to do?
If you would like to buy more shares and you have the funding to do so, your first step is to choose an independent surveyor who will produce a valuation report for your home. The surveyor should be a member of the Royal Institution of Chartered Surveyors (RICS). The SO Resi team will be able to put you in contact with surveyors and solicitors who are knowledgeable about shared ownership.
SO Resi will then send you an offer letter, accompanied by an acceptance form. If you’d like to accept our offer and buy more shares, you will need to appoint a solicitor and share their details with us. We can recommend you to our panel of solicitor, if you need a solicitor.
Finally, you’ll need to make sure your funding is ready in time for the completion date.
What are the costs?
Firstly you will have the cost of the surveyor which will establish the current market value of your home. So, for instance if the new value of your SO Resi home is £250,000 and you want to increase your ownership by 10% per cent, this would cost £25,000. To fund this, you can either top up your existing mortgage (and pay a higher mortgage payment each month) or you may have savings that would enable you to pay for it outright. In either scenario as the size of your share increases , so will any service charges but equally the rent on the share you don’t own will reduce too.
You will also have to pay for your solicitor’s fees.
How long does it take?
Once you’ve told us to go ahead, the process from initial conversation to completion date usually takes six to eight weeks.
What if I can’t afford to buy 10 per cent?
SO Resi has created another option to help its home owners buy more shares with more flexibility - SO Resi Plus. The scheme allows residents to buy an extra 1%share of their home annually for 15 years. The price is pre-arranged, which compared to ‘traditional staircasing’, saves the cost of the valuation, survey and solicitors fees every time and it’s a quicker process too. In addition to the pre-arranged 1%share, you can of course also buy larger shares if you can afford to, as already described.
If you’re looking to increase the shares you own in your property, or start your home buying journey, contact us on 0208 607 0550 for more information.