Shared Ownership Staircasing
Staircasing - Increasing your share of the property
You’ve found your new home, bought it and moved in. As a leaseholder of a Shared Ownership property bought either new, as a resale or via Social HomeBuy, you can buy further shares in your property. This process is known as “staircasing”, enabling you to own a greater proportion of your home. The greater the share you buy in your home, the less rent you will pay to Family Mosaic. If you staircase to 100% you become an outright owner and pay no rent!
The price you pay for any extra share is based on the market value of your home at the time you wish to buy, which could go up or down. The value will be set by an independent RICS qualified valuer. There will be some costs involved in staircasing such as a valuation fee and solicitor’s fees, although it shouldn’t cost as much as buying your first share.
Buying additional shares in the property is known as interim staircasing. However, if you staircase to 100% (either in one transaction or after one or two interim staircasings) the share taking you to 100% ownership is known as final staircasing. When this occurs, you own the property outright and are no longer a shared owner. In this case you will not pay rent to Family Mosaic but you will still pay the service charge and may have to pay an annual ground rent.
You don’t have to staircase - it is entirely up to you. There are no restrictions in the majority of cases; however, we would recommend in the first instance that you refer to your lease. This may require assistance from your legal representative.
What are the benefits of Staircasing?
Most people aspire to own their own property and you made the step towards this when you bought your affordable home that you don’t own outright.
Buying a greater proportion of your home has a number of benefits:
- You reduce the amount of rent you are paying to Family Mosaic.
- When you decide to sell your home, the greater percentage you own, the more profit you will make if the value of your home has increased.
- If you own your property outright (become 100% owner) you can sell your property on the open market using an Estate Agent of your choice.
- If you staircase and own your property outright, you can sell your home to anyone interested in buying it and not restricted to those applying for affordable homes who meet the criteria within the lease i.e. if you have a key worker lease, you usually must sell to a key worker.
- Becoming the outright owner allows you to maximise the profit from any major home improvements. Once you own 100% you will get back the full amount of any profit on the current market value when you come to sell your home.
How do I staircase?
- Complete the "request to staircase" registration form
The first step to staircasing and buying more shares in your home is to complete the request to staircase registration form. Once completed you will be emailed details of the next steps and gain access to a login area to view your application progress in your sales status.
- Appoint a solicitor
Before instructing Family Mosaic to proceed, it is best to select your solicitor so that you are ready to act promptly when you receive the valuation report, which is only valid for three months. We recommend using the solicitor who originally dealt with your purchase as they are most likely to have a lot of your details regarding your property available. If this is not possible we can assist you by providing you with a list of client recommended solicitors. You require a solicitor to deal with your staircasing transaction as it involves changes to your existing lease and other legal work associated with your mortgage and home. Remember that you pay for your solicitor’s time, so the more often you write to or phone your solicitor, the higher the charge is likely to be.
- Instruct us to value your home
Having obtained this information you now need to know how much it will cost to buy the additional shares. To do this, you need to complete a ‘request for valuation’ form. The information you provide on the form will be passed on to the valuer you select. The form requires you to select a qualified independent valuer from our panel. All of our panel valuers are registered with the Royal Institute of Chartered Surveyors (RICS).
On receipt of the completed form, the valuer will be instructed to arrange an appointment with you to value your home. To ensure this is dealt with promptly please provide contact details and be as flexible as possible to ensure the valuer can deal with our instruction in an effective and timely manner. You will be able to pay the valuer directly once they have made contact with you to arrange an appointment.
After viewing your home, the valuer will research your area and produce two copies of their valuation report with comparatives of similar properties in your area which have been sold or are being marketed. This report will be sent to the Resident Sales Team who will check the details and issue an offer letter to you along with a copy of your valuation report. Please note the valuer’s report is only valid for three months and therefore you must act quickly to complete the staircasing transaction before the valuation report expires. If the transaction doesn’t complete by this date you will incur additional costs for a new valuation and your solicitor may charge additional fees as we will make you a new offer based on the current valuation. This valuation could be lower or higher than the original valuation, dependent on the housing market at the time.
For more information on buying more shares in your home take a look at our ‘We can help with staircasing’ brochure which is available to download or contact the Resident Sales Team by phone on 020 3478 9875 or email email@example.com.