Additional Staircasing

Understanding ADDITIONAL staircasing

Known as staircasing, this process allows shared owners to build the percentage share that they own in their home with most being able to staircase all the way up to 100% ownership. For example, if you initially purchased a 25% share in your home and went on to buy an additional 25% down the line, you would then own 50% of the property.

As and when your financial circumstances change, you can choose to buy more shares in your Shared Ownership home through a process known as ‘staircasing’; this is completely optional and you do not have to buy more shares if you don’t want to. You may acquire additional shares in your property at a price equal to the relevant proportion of the current full open market value of the property. For example: if your home is valued at £300,000 and you want to buy an additional 25% share, the purchase price of your share will be £75,000.

There will likely be other costs involved when buying more shares in your property including broker and solicitor fees, but these will vary from firm to firm. The staircasing process will also vary depending on which version of the Shared Ownership scheme you bought with as some changes were introduced as part of the new Shared Ownership model in 2021/2022. For more in-depth information, please visit our staircasing guide.

Shared Ownership FAQs – What You Need to Know

What is staircasing and how does it work?

Staircasing lets you buy more shares in your property, usually in chunks of 5% or more. If you have a new model lease, you may be able to staircase by 1% annually for 15 years.

What is the minimum share I can staircase by?

Under the new lease, you can staircase by 1% annually or in larger amounts starting from 5%. Under older leases, the minimum is typically 10%.

Are there any costs involved with staircasing?

Yes. You may need a valuation, legal advice, and possibly pay Stamp Duty if you’re reaching or passing 80% ownership.

Will I have to pay Stamp Duty again if I staircase?

Only if you didn’t elect to pay it on the full market value at the outset and you’re staircasing to 80% or more.

Additional Staircasing Explained

by Isabela Faria

Slade De Lacey

Head of Employment

There are many reasons why a current shared owner would want to increase the percentage they own in their home. For example:

If you choose to purchase more shares, your mortgage will increase while your rental payments will decrease at the same time.

In most instances, you can purchase up to 100% of your home, in which case you would no longer pay any rent, just your mortgage along with any outlined service charges and ground rent.

The greater the share you own, the more you will benefit from increased property prices. If you go on to buy 100% of your home, you will also no longer be required to give your housing provider the opportunity to market the property first at the time of sale. To find out more about this process, speak to our dedicated shared ownership team.

If you staircase all the way to 100% ownership, you will likely have access to a wider selection of mortgage options as you would be eligible for a standard mortgage, rather than a Shared Ownership mortgage.

Existing shared owners are not covered by the new staircasing rules. Therefore, if you choose to buy additional shares in your home, you will first need to contact your housing provider and give notice that you intend to staircase.

You will need to arrange for an independent surveyor to visit the property and work out the current value of the property. You will receive a copy of the valuation and be asked to confirm that you would like to proceed with the process, with most valuations being valid for three months. In the case that you take longer than this set period to complete on the transaction, you will be required to arrange for a new valuation to take place.

If a buyer is to purchase a home under the new model lease introduced in 2021, they will have the option to staircase by 1% each year for 15 years from the date of purchase. Please note that while most new-build Shared Ownership properties now follow the new model lease, some homes, particularly resales or those developed under older funding arrangements, may still be sold under the previous lease model without the 1% staircasing option.

Shared owners who wish to take up the option of the 1% staircasing will not be required to pay for an independent valuation and the fees will be heavily reduced, although some legal fees are likely to be incurred.

The 1% staircasing option only applies where the home is held under the new model lease. Where an existing lease has been transferred (for example, on the sale of an existing Shared Ownership property to a new owner through the resale process), the 1% option will apply only if the lease being transferred is already a new model lease.

As the 1% is not likely to be large in terms of monetary value, it is expected that most transactions are likely to be paid from the owner’s savings. However, a mortgage lender may consider a small further advance, or it may be included on the back of a remortgage or mortgage for home improvements. Your lender or specialist broker will be able to advise further on this.

For owners with the new lease, the minimum amount that you can staircase in the normal way (above but not including the 1%) is now 5%. If you wish to proceed with either option, you would need to contact your housing association in the first instance.

While there is the obvious cost of the purchase price for the additional shares that you are buying, there are many other costs involved when staircasing in a Shared Ownership home. Generally speaking, we would recommend having around £2,000 saved for the process, however this amount can vary depending on a number of factors:

You will be required to pay for the surveyor report required to value the property.
You will need to appoint a solicitor or conveyancer to act on your behalf during the staircasing process.
You may need to re-mortgage your property to be able to afford the additional shares with mortgage fees ranging from lender to lender.
Depending on the value of the additional shares that you are buying, you may be required to pay Stamp Duty depending on your initial chosen SDLT option.

If you chose to make a one-off payment when you first bought your home, you won’t have to pay any Stamp Duty at the time of staircasing.

However, if you chose to pay in stages, there will be no Stamp Duty to pay until your owned share reaches 80% and above. If you are staircasing to 80% in your home, you will need to pay Stamp Duty on the transaction that took you over 80% and any further transactions.