Laura Gaskell is the Property Sales Manager at Snugg Homes (part of the Jigsaw Homes Group). She has worked in housing for 12 years and joined the Jigsaw Homes Group Development Team in 2016, before becoming the Property Sales Manager for Snugg Homes in 2019. She loves working with the Snugg Homes Team and really enjoys the diverse nature of her role, which includes updating stakeholders, working closely with partner organisations, monitoring their targets and performance and ensuring that they put customer focus at the heart of everything they do.
I am a first time buyer and I am interested in Shared Ownership, but will I be able to own my home outright in the future?
One of the most appealing aspects of Shared Ownership is its flexibility, allowing you to increase the share you own over time as your financial circumstances change. In many cases, the answer is yes, you can own your home outright. However, how far you can increase your ownership depends on the type of lease the home is sold under, so understanding this from the outset is essential if owning outright is part of your long-term plan. Let’s break it down for you.
What is Staircasing?
Staircasing is the process of buying additional shares in your home over time. It’s entirely optional, meaning you are never obligated to buy more shares unless it feels right for you financially.
Typically, you can staircase in increments of 5% or more, and there’s no limit on how many times you can do this, although it’s always advisable to check your individual lease for any specific conditions.
The cost of each additional share is calculated as a proportion of the home’s full market value at the time of purchase. For example, if your home is valued at £300,000 and you choose to buy an additional 25%, the cost would be £75,000.
Designated Protected Area (DPA) Lease
If your home is located within a Designated Protected Area, it will be sold under a DPA Standard Model Lease. These areas are typically rural locations where affordable housing is limited and needs to be protected for future buyers.
Under a DPA lease, the maximum share you can purchase is 80%. This means the home will remain as Shared Ownership in perpetuity, ensuring it continues to provide affordable housing opportunities for future buyers.
Standard Model Lease
If your home is sold under a Standard Model Lease, you could staircase all the way up to 100% ownership in the future.
When you decide to purchase additional shares, the value of those shares will be based on the current open market value of the property at that time. A valuation will be carried out, and the cost of the new share will reflect the home’s most up-to-date value.
As your ownership increases, the rent you pay on the remaining share reduces accordingly. Once you reach 100% ownership you will no longer pay rent; service charges and ground rent may still be applicable on some leases.
Standard Model Lease 2021–26
If your home is sold under the Standard Model Lease 2021–26, there is an additional staircasing option designed to make increasing ownership even more affordable.
For the first 15 years, you can choose to staircase by as little as 1% per year. This option comes with many advantages; there are no administration or solicitor’s fees. Instead, the price of each 1% share is calculated using the original market value, adjusted annually in line with the House Price Index (HPI). Your Registered Provider will supply an updated HPI valuation at least once a year and again when you request to staircase, making it easier to plan and budget confidently.
If you prefer to increase your ownership more quickly, you can still purchase shares of 5% or more at any time.
Here to Help
The Snugg Homes team is here to assist you at every stage of your homebuying journey. If you’re interested in any of our impressive developments, we’re ready to help you find the perfect home.
To register interest, visit snugghomes.co.uk. Stay connected with us on social media by following @snugghomes on Instagram, TikTok, Facebook and LinkedIn.
First Time Buyer is an exciting bi-monthly glossy which takes a stylish and comprehensive look at all the options available, setting them out in an entertaining and informative way, and helping potential customers navigate their way through what is often a daunting and complex process. We dispel the myths, reinforce the facts and arm the reader with the tools necessary to make their homeownership dreams a reality.
