Buying more shares (Staircasing)
As a shared owner, you will have bought between 25% and 75% of your property upfront and are paying rent for the remaining share. We encourage shared owners to buy more equity in their property. This process is called ‘staircasing’. You can staircase up to three times, buying at least 10% equity each time. Buying a greater share in your property will reduce your rent.
If you want to buy additional equity in your home we will arrange for an independent valuer to assess the current market value of your home. An independent financial advisor will assess what share you can afford to purchase. We will sell the additional equity to you if we are happy you can afford it.
You can staircase up to 100% ownership and sell the property at the same time in some situations. Some leases have restrictions on re-selling.
We only consider requests to sell us equity (ie reduce your share) in exceptional circumstances.
What will happen when you contact us about staircasing
We will send you a staircase valuation instruction letter and our guide to staircasing within three working days of you contacting us. If you want to proceed, you will need to return the valuation instruction along with the valuation fee. Remember that the minimum equity you can buy is 10%.
We will arrange for an independent valuer to assess the market value of your equity. You need to pay for this. We will let you know the value of the equity within two working days of receiving the valuation from the independent assessor. Valuations do not include the value of any improvements you have made to the property.
If you don’t agree with the valuation you can dispute it. The following may help to settle the dispute:
- you can provide local estate agent information on at least three sales sold in the local area in the last three months for us to consider
- we can ask the valuer to reconsider their valuation. If we do, we will write to you with the outcome
- you can ask for a final decision from the district valuer. You will need to pay for this. We will not continue with the sale if you are unhappy with the district valuer’s valuation.
If you choose to proceed, we will ask for financial information from you so we can check any new payments are affordable. An independent financial assessor will assess your ability to proceed with the purchase. You are responsible for paying your legal expenses and any required additional mortgage fees.
We will ask our solicitor to process the sale if we are happy you can afford the payments. We will do this within four working days of receiving your instruction.
Your rent and service charges
Your rent will reduce if you ‘staircase up’ to own a bigger share of the property. We will let you know how much rent you need to pay based on how much of the property we still own. The amount of property you own does not affect your service charge payments, you will need to continue paying these at the set rate.
Guide to staircasing terms
- Equity refers to the share of the value of the property. For example, you have 100% of the equity if you own the whole of the property, and 50% if you own half of the property.
- Ground rent is paid by leaseholders to the freeholder. The lease sets out the amount, when it is due and when it will increase.
- Affordability is calculated based on a government approved method. Your housing costs are considered affordable if they are less than 45% of your net household income.