Shared Ownership Staircasing

If you bought a piece of a property using the Shared Ownership scheme, you may want to increase how much of the home you own over time - and you can do this with a process called ‘staircasing’. Here we’ll cover how staircasing works, show you some example calculations, and explain whether it’s worth doing.

What is Shared Ownership staircasing?

This is the name for the process of buying more shares in your Shared Ownership property. Initially, you’ll have bought a share of your home - usually between 25% and 75%. Staircasing allows you to incrementally increase your level of ownership.

Often, staircasing takes place in chunks of at least 10% each time. However, some older properties come with a 25% minimum. And, under the most recent Shared Ownership model, the government introduced the ability to buy a 1% share for some properties during the first 15 years.

Can you staircase to 100%?

In most cases, you can staircase to a full 100% ownership of your property. At this point, you’d completely own the home and would no longer have to pay rent to a landlord, housing association (HA) or council.

However, this isn’t always possible. Some Shared Ownership leases contain restrictions around the maximum share you can own (usually 80%). But, these limits tend to only be in rural ‘designated protected areas’. Also, if you buy an Older Persons Shared Ownership (OPSO) home, the maximum you can own is 75%.

Keep in mind, even at 100% ownership, you may still have other ongoing costs like service charges, ground rent, sinking funds etc. So, it’s always worth going over your lease and specific property details with a broker to ensure you’re comfortable with any rules or restrictions.

How does staircasing work?

The exact process may vary, but here’s an example of the steps involved when staircasing with a Shared Ownership property:

1. Speak with an expert: Having a chat with a broker means they can help you evaluate your current finances, property lease and mortgage - then help you create a plan to purchase more shares.

2. Get a valuation: You’ll need a RICS-accredited surveyor to carry out a current valuation of your property. Your broker can help arrange this and give you advice on property market conditions.

3. Work out costs: Once you know the property’s full market value, you can sit down with your advisor and calculate how much it will cost you to buy more shares, and how affordable it will be.

4. Purchase plan: With a valuation and an idea of costs, your broker will create a plan for financing your purchase. Remortgaging can be an option as it allows you to staircase with little to no upfront cash.

5. Solicitor update: A solicitor will need to update your property deeds to show your increased level of ownership in the home after the share purchase is complete.

Staircasing and remortgage lending options

If you need access to additional funds to buy more shares in your property, remortgaging is a potential option to explore with your broker.

Here are some examples of mainstream lenders and their stance on remortgaging to buy additional shares in a Shared Ownership home:

• Halifax: Although Halifax is open to remortgaging to raise funds for staircasing, consent of the HA is required (unless it’s to buy the final share of the property).

• Nationwide: With Nationwide, it’s possible to borrow up to 90% of your current share’s value in order to purchase an additional (or final share) of your home (£5,000 minimum).

• Barclays: After you’ve obtained consent from the scheme provider to buy additional shares, Barclays will consider letting you borrow up to 85% of the current market value of the total share that you’ll own after staircasing.

Some lenders won’t accept purchasing more shares with Shared Ownership as an acceptable reason for refinancing. So it’s always worth getting your broker to show you all the realistic remortgaging possibilities.

Shared Ownership staircasing calculator

Unfortunately, using a Shared Ownership staircasing calculator when buying more shares can be challenging because the exact figures will depend on your location, existing property share, current valuation, and housing provider.

However, it’s helpful to see some examples to get an idea of the basic calculations:

Example 1

Current value of the property: £300,000

Your existing share: 50%

Additional cost for 10% share: £30,000

Total shares owned after staircasing: 60%

Rent payable on: 40%

Example 2

Current value of the property: £375,000

Your existing share: 40%

Additional cost for 15% share: £56,250

Total shares owned after staircasing: 55%

Rent payable on: 45%

It’s important to remember that the original purchase price of your Shared Ownership home usually doesn’t matter. The cost of the additional share is based on the current market value of the whole home.

The only exception is with newer homes that allow 1% staircasing for the first 15 years. If eligible, the cost of a 1% share will be based on the original house price you paid - increased or decreased in line with the House Price Index (HPI).

Extra costs to consider

The other thing you’ll have to factor in when staircasing is the potential added costs and fees to buy more shares. Along with the cost of purchasing additional shares (based on the current market value), you’ll also need to think about:

• Solicitor fee

• Remortgage costs (like product fees)

• Landlord admin fee

• Valuation fee

• Broker cost (sometimes this can be free)

• Stamp Duty (potentially, if you reach 80% ownership)

How we can help you staircase

Staircasing can be an excellent way to build your way towards full home ownership. Or, simply reduce the amount of rent you pay with a Shared Ownership property. However, it’s vital to keep your costs as low as possible and find the right lender.

Our brokers have plenty of experience helping people like you buy more shares with staircasing. They can arrange the best deal and introduce you to the right lender based on your location, finances, and current level of ownership.

Along with finding the best mortgage deal and introducing you to the most suitable lender, our brokers will be there from start to finish to guide you through the whole process. So, they’re on hand to help with questions, queries and recommendations.

You can have a free, initial chat with one of our Shared Ownership specialists here:

Get expert advice about staircasing

Speak To An Adviser

Is it worth staircasing?

It can be, but it’s always worth running the numbers. Owning more shares means there’s a smaller portion of rent to pay (or none once you reach 100%). However, it’s important to get the best mortgage rates to make it worthwhile. This way you might get to own more of your property and keep extra cash in your pocket.

Whether staircasing is worth it can also depend on the wider housing market. For example, a drop in house prices could actually benefit you - because if your home’s market value is lower, it makes it cheaper to buy more shares. Yet, the opposite is also true, higher house prices can make it more costly.

Why choose Teito for your Shared Ownership mortgage needs?

If you want to buy more shares in your Shared Ownership property, our brokers can help find you the best way of staircasing your way to a higher level of ownership.

Our brokers will create a bespoke plan and approach the situation in a way that’s tailored to your needs and circumstances. This means you can cut through any potential complexities and reach your staircasing goals.

Here are some more of the reasons people choose us to help them get the best deal with Shared Ownership staircasing:

• Our advisors can create a personalised staircasing plan

• We can guide you through the whole process

• Our mortgage brokers are 5-star rated on leading review sites

• Your first chat is free, with no obligation to proceed

Ready to take advantage of a free, no-obligation chat with a broker who specialises in Shared Ownership mortgage staircasing? Get started here.