Staircasing allows you to buy additional shares of the property, so that you own a larger proportion.
Eventually, you could own the entire property outright. The following guide will take you step-by-step through the process you need to follow.
Having decided that you want to increase the size of your share, the first thing to do is decide how you are going to finance the purchase. It is likely that you will need a further mortgage advance – check with your lender.
What is necessary?
It is a requirement of your shared ownership lease that an independent valuer, i.e. District Valuer or R.I.C.S valuer decides the market value. This is to ensure impartiality and fairness. You will have to pay for the valuation report, the price of which will depend on which valuer is used, You should expect to pay a fee of approximately £150 plus VAT.
We will check your lease and confirm in writing the value and the fee once you decide to go ahead.
Please note that you will have to pay for the cost of the valuation even if you change your mind about buying once we confirm what the share price will be.
Is the valuation binding?
Yes. In general terms, the valuation will determine the price for further shares. However, the valuer will take account of any enhanced value due to structural improvements you have made. Any such improvements will be valued separately so that you do not have to pay twice for your investment.
How does this work?
This is best demonstrated by an example:
100% value of house: £150,000
Increased value due to improvements: £10,000
Total market value: £160,000
If you own 50% then you would be able to buy the other 50% at the current valuation without the improvement value, half of £150,000, i.e. £75,000.
You do not pay any of the enhanced value.
What is the minimum share that I can buy?
You can usually buy shares in blocks of 25%. However, leases issued after July 2004 allow you to staircase in multiples of 10%. So, if you originally bought 50%, you could buy another 10% so that you own 60%.
Alternatively you could buy the remaining 50% in one go in order to own the property outright, i.e. 100%.
The rent you pay will reduce in line with the share you are purchasing.
Should you decide to buy the remaining share in your home so that you own it outright, we will automatically transfer the freehold of the property (if it is a house) into your name, once you complete the purchase.
How long will it take?
Once the price at which you can buy is known, we will notify you in writing. If you decide to go ahead, you must tell us the name and address of the solicitor who will be acting for you. This is so that we can give our consent to the sale when you are ready to complete. In general terms the normal time for conveyancing is around three months.
It should be noted that the valuation is only valid for a period of three months. If you do not complete your purchase within the time scale it will be necessary to have a revaluation or a confirmation that the valuation is still correct. There may be an additional charge if a revaluation is necessary. In practice this rarely happens.
Is there anything else?
It will be a condition of the sale that you ensure that your rent account is fully up to date before we grant our consent. Your solicitor will usually check the position with us at the point of completion.
You will be required to sign a staircasing agreement once you decide to proceed. This sets out the terms and conditions by which you will be bound.
What do I do next?
Should you decide to buy a further share, please call the Customer Service Team on 0115 9166 0666 or email email@example.com for the necessary forms. This will give us the information and authority we need to instruct the valuer.