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Staircasing – buying more shares

Staircasing is the process of buying additional shares in your shared ownership home.

Staircasing

Staircasing is the process of buying more shares in your shared ownership home.

You can increase your share when the time is right for you, helping you move closer to owning your home outright. As the percentage you own increases, the rent you pay to whg will usually reduce.

Some customers staircase gradually, while others buy all the remaining shares at once. The amount you can buy and the maximum share you can own will depend on the terms of your lease.

Find out about your staircasing options

Why staircase?

Pay less rent

You only pay rent to whg on the share of your home that you don’t own.

When you buy more shares, the share owned by whg becomes smaller, so the rent you pay will usually reduce. If you staircase to 100%, you will no longer pay rent to whg.

You may still need to pay a mortgage, service charges and other costs connected with your home.

Build up your ownership

Staircasing allows you to increase the percentage of your home that belongs to you.

This can help you build more equity in your property and move closer to full home ownership at a pace that suits your circumstances.

Benefit more if your home increases in value

The more of your home you own, the greater your share of its value.

For example, if you own 75% of your home when you sell it, you will receive 75% of the sale price, after any mortgage and selling costs have been paid.

Property values can go down as well as up, so owning a larger share also means you are affected more by any fall in value.

More options when you own 100%

If your lease allows you to staircase to 100%, you will no longer be a shared owner.

Depending on your property and the terms of your lease, this may:

give you access to a wider choice of mortgages
make it easier to sell your home on the open market
give you more flexibility over your home
mean you receive the full benefit of any future increase in its value.

Service charges or estate charges may still apply after you reach 100% ownership, particularly if you live in a flat or on an estate with shared spaces and services.

Is staircasing right for you?

There is no obligation to staircase. You decide whether to buy more shares and when the time is right.

Before going ahead, it’s important to consider:

how much of an additional share you can afford
whether you will use savings, increase your existing mortgage or remortgage
how your new mortgage payments would compare with the reduction in rent
the fees involved in completing the purchase
whether you plan to remain in your home for the longer term.

You may wish to speak to your mortgage lender or an independent mortgage or financial adviser before making a decision.

How to staircase

1. Check your lease

Your lease explains the staircasing rules that apply to your home, including:

when you can buy more shares
the minimum percentage you can buy
the maximum share you can own
any restrictions that apply to your property.

Many leases allow customers to staircase to 100%, but some place a limit on the maximum share that can be owned.

Check your lease online

2. Contact whg

We will check the details of your home and explain:

the process that applies to you
the information we need
the fees you will need to pay
what happens next.

Contacting us does not commit you to buying more shares.

Email shared.ownership@whgrp.co.uk

3. Consider how you will pay

You may be able to pay for your additional shares using:

savings
additional borrowing from your existing mortgage lender
a new mortgage with another lender.

Your lender will need to confirm that any new borrowing is affordable. There may also be mortgage arrangement, valuation or early repayment fees to consider.

4. Arrange a valuation

You will need an independent open market valuation completed by a surveyor who is registered with the Royal Institution of Chartered Surveyors, commonly known as RICS.

The valuation confirms the current market value of your whole home. We use this figure to calculate the price of the additional share you want to buy.

For example, if your home is valued at £200,000:

a 10% share would cost £20,000
a 20% share would cost £40,000
a 25% share would cost £50,000.

You will be responsible for paying the valuation fee.

Valuations are normally valid for a limited period. We will explain how long you have to complete your purchase before an updated valuation is needed.

Please tell us about any improvements or alterations you have made to your home, as these may need to be considered as part of the valuation.

5. Receive your staircasing offer

Once we receive the valuation, we will confirm:

the market value of your home
the price of the additional shares
the share you would own after staircasing
your estimated new rent
any whg fees.

You can review this information before deciding whether to continue.

6. Appoint a solicitor

Staircasing is a legal property transaction, so you will need to appoint a solicitor or licensed conveyancer.

It is helpful to choose someone who has experience of shared ownership and staircasing. They will:

deal with the legal documents
work with whg and your mortgage lender
check whether Stamp Duty Land Tax is payable
register your increased ownership with HM Land Registry.

7. Complete your purchase

Your solicitor will agree a completion date with whg.

On completion:

payment for the additional shares will be made
your percentage ownership will officially increase
your rent will be recalculated
you can begin enjoying the benefits of owning more of your home.

We will write to you to confirm your new share and revised rent.

What will staircasing cost?

As well as paying for the additional shares, you should budget for the associated fees.

The additional shares
RICS valuation fee
Solicitor’s fees
Mortgage and financial advice fees
whg administration fee
Stamp Duty Land Tax (payable in some circumstances, particularly if the purchase takes your ownership above 80%)

Selling your home

Thinking about moving? You can sell your shared ownership home at any time.

Selling a shared ownership home is similar to selling any other property, but there are some extra steps to follow. These will depend on how much of your home you own and the terms of your lease.

Contact us before arranging a valuation or putting your home on the market. We will check your lease, explain your selling options and guide you through what happens next.

Email shared.ownership@whgrp.co.uk

Your options for selling

The way you sell your home will depend on the share you own and what your lease allows.

Sell the share you currently own

If you own less than 100%, you can usually sell your existing share to another shared ownership buyer.

For example, if you own 40% of your home, the new buyer would normally buy that 40% share. They would then pay rent to whg on the remaining 60%.

The buyer will need to meet the eligibility and affordability requirements for shared ownership. whg must approve the buyer before the sale can proceed.

Sell 100% of your home

Depending on your lease, you may be able to sell your home at its full market value, even if you do not currently own 100%.

This is known as simultaneous or back-to-back staircasing. You buy the remaining shares from whg at the same time as selling the whole home to your buyer.

Your solicitor arranges both transactions so that they complete together. This can open your home to buyers who are not looking for shared ownership, but the legal process and costs may be higher.

We will check whether your lease allows this and explain what would be involved.

If you already own 100%

If you have staircased to 100%, you can usually sell your home on the open market through an estate agent.

You should still contact us before starting the sale. Depending on the type of property and your lease, your solicitor may need information from whg and there may be service charges, estate charges or other legal requirements to deal with.

How much could you receive?

If you sell your existing share, the value of that share will be based on the current market value of your whole home.

For example, imagine:

your home is valued at £200,000
you own a 40% share
your share is therefore valued at £80,000.

From the money you receive, you will normally need to repay your outstanding mortgage and pay your selling costs.

If your home has increased in value since you bought it, the value of your share may also have increased. If its value has fallen, your share may be worth less than you originally paid.

How the selling process works

1. Contact whg

Get in touch before arranging a valuation, appointing an estate agent or marketing your home.

Email shared.ownership@whgrp.co.uk

2. Decide how you want to sell

We will explain whether you can:

sell the share you currently own
staircase to 100% and sell the whole home
consider either option.

3. Arrange an independent valuation

In most cases, you will need an independent valuation completed by a surveyor registered with the Royal Institution of Chartered Surveyors, commonly known as RICS.This is then used to calculate the value of the share you are selling.

You will be responsible for paying the valuation fee.

4. Receive your resale information

Once the valuation and any required information have been received, we will confirm what you need to do next.

Do not advertise your home until whg has confirmed that you can proceed.

6. Viewings take place

You may need to make your home available for photographs and viewings.

You remain responsible for looking after your home throughout the sale.

7. A buyer is found

If you are selling your existing share, the buyer must meet the eligibility and affordability requirements for shared ownership.

whg will assess and approve the buyer before the legal process begins.

You should not agree a private sale or accept money directly from a prospective buyer without speaking to whg.

9. Appoint a solicitor

You will need to appoint a solicitor or licensed conveyancer to deal with the legal work.

Shared ownership sales can be more complicated than standard property sales, so it is helpful to choose someone with experience of shared ownership resales.

10. Exchange and completion

When all legal enquiries have been answered and everyone is ready to proceed, contracts will be exchanged and a completion date will be agreed.