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Staircasing refers to increasing the share of the property you own. This page gives you more details about staircasing with shared ownership homes.
You’re on the ladder, now climb the stairs and get more of what you love.
See why increasing the share in your home could really work for you.
What is staircasing?
Staircasing means to increase the share of the property you own. You can do it gradually over time and in most cases, you can own your home 100%*. The cost of additional shares is calculated by the market value of your home when you decide to start staircasing.
*Some shared ownership properties have restricted staircasing. Please check your tenancy agreement for clarification.
Staircasing in detail
Benefits of staircasing
Pay less rent
By reducing the percentage of your property that you rent from us, you'll cut your monthly rent bill. Your mortgage repayments may go up, but this then goes towards you owning your own home. So overall, you may be better off financially. Please note that as mentioned in your tenancy agreement, rental costs increase annually, so it's worth reviewing your rent and mortgage regularly.
Benefit from any increase in house prices
The more of your home that you own, the greater you’ll benefit if its value increases.
More mortgage choice
If you staircase your way to owning 100% of your home, you’ll be able to get a standard mortgage, rather than a shared ownership mortgage. As standard mortgages are more widely available, they tend to be cheaper.
Freedom to sell
As a shared owner, any potential buyers of your property are required to meet criteria for affordable home ownership and would need to be assessed and approved by Thirteen. If you own 100% of your home, when you want to move you can sell your home on the open market.
Owning a greater percentage of your own home will give you a greater sense of security, as you are investing in your future.
Staircasing in detail
How does staircasing work?
- The cost of additional shares in your shared ownership home is calculated by the market value of your home when you decide to start staircasing. For example, if your property is valued at £100,000 and you want to buy an additional 25% share, the purchase price of the extra share would be 25% of the valuation, which would be £25,000.
- You need to get an independent valuation of your home each time you staircase.
- There may be restrictions in your tenancy agreement about the number of times you can staircase. Quite often it's three times, and financially it's sensible to staircase in the largest steps that you can manage.
- Unless you can afford to pay for further shares from savings, staircasing will normally involve either taking a further advance from your current mortgage lender or a new mortgage for both your existing mortgage and the new shares from another lender.
- Additional costs can include solicitors’ fees and mortgage fees. In some cases, you may be required to pay stamp duty and a Land Registry fee.
Staircasing in detail
Financial examples of how staircasing works
These two examples give you details about costs based on a £100,000 home:
First representative example – 50% share
A customer wishes to buy 50% of the property (£50,000) through shared ownership, and pay rent on the rest.
The customer has savings of £5,000 (10% of £50,000) to put down as a deposit, and qualifies for a repayment mortgage with a 4% interest rate over 25 years, The monthly mortgage cost would be £273.53. Based on the remaining value of the property (£50,000), the monthly rent would be £114.58. The total monthly costs would be £388.11.
Second representative example – 75% share
To compare costs, the customer asks to see an example of costs if they bought 75% of the property (£75,000) through shared ownership and paid rent on the rest.
The customer has savings of £7,500 (10% of £75,000) to put down as a deposit, and qualifies for a repayment mortgage with a 4% interest rate over 25 years, his monthly mortgage cost will be £356.29. Based on the remaining value of the property (£25,000), the monthly rent would be £57.29. Total Monthly Costs: £413.58
In the second example, the customer puts down a higher deposit and their outgoings would be £25.47per month higher, but they would own 75% of their home. Mortgage costs will increase as you staircase, but rent charges will reduce the higher the percentage of your home that you own. So it can be beneficial to seek advice and support from Thirteen that's tailored to your personal circumstances to support you on your staircasing journey.
Additional costs would include building insurance, management charges and possible service charges, depending upon the property type.
*All costs are estimates and for representative purposes only.
Get in touch
To discuss your financial situation and find out how staircasing could benefit you, or for help with financial planning, please get in touch:
- on 0300 111 1000
- or contact us
This is a non-regulated service, and you may wish to seek independent financial advice.