Understand the ins and outs of shared ownership staircasing with our comprehensive guide. Learn about costs, benefits, and the steps involved.
Q: What is Staircasing in Shared Ownership?
A: Staircasing is the process of buying additional shares in the property you own, increasing your equity and reducing specified rent. It offers advantages like the ability to purchase 100% of your home, more mortgage choices, increased security, and potential profit from property price uplift.
Q: Do I Have to Staircase?
A: No, staircasing is completely optional. You are not obligated to staircase unless you choose this option.
Q: How Do I Start the Staircasing Process?
A: Contact your housing association, provide notice of your intention to staircase, arrange a property valuation, and consider funding options. Consult a mortgage adviser for the best mortgage product.
Q: How Long is the Valuation Valid?
A: Valuations are usually valid for three months. Extensions may be granted, or a desktop survey based on comparable property prices might be an alternative.
Q: Can I Staircase to 100%?
A: Most shared ownership leases allow staircasing to 100%, but it depends on the lease terms and affordability. Some leases may have an 80% cap.
Q: How Much Does it Cost to Staircase?
A: Costs include valuation, legal fees, mortgage arrangement fees, possible SDLT, and landlord’s legal/admin fees.
Q: Do I Need a Deposit to Staircase?
A: No deposit is needed for staircasing unless part of a remortgage to increase equity.
Q: Is Stamp Duty Land Tax Payable When Staircasing?
A: It depends on whether a one-off payment was made on the initial purchase. If paid in stages, Stamp Duty may be payable if staircasing above 80%.
Q: How Many Times Can I Staircase?
A: Older leases allow three staircasing applications before a final one, but policy changes may affect this. Check your lease for specifics.
Q: What is the Difference Between Interim and Final Staircasing?
A: Interim staircasing allows up to 80% ownership with specified rent. Final staircasing means owning 100%, with the housing association no longer having an interest.
Q: Is Staircasing Registered at HM Land Registry?
A: Yes, your legal adviser will register staircasing with HMLR, noting it on the title or registering the transfer of the freehold interest.
Q: What is a Memorandum of Staircasing?
A: A memorandum records additional share purchase and rent reduction in shared ownership. It’s included in shared ownership leases’ appendices.
Q: What is Back-to-Back Staircasing?
A: Back-to-back staircasing allows selling on the open market if nomination procedures are exhausted. It’s an option for selling after staircasing to 100%.
Q: Do I Need a Conveyancer for Staircasing?
A: Yes, staircasing is a legally binding property transaction. A conveyancer, preferably specializing in staircasing, is essential for advice and representation.
Q: Differences Between Older Leases and the New Housing Corporation Model Lease for Staircasing?
A: A new 1% staircasing schedule has been introduced. If you are purchasing a new build, your conveyancer will inform you if your lease allows staircasing in 1% increments, unlike older model leases that typically allow 10% increments.
Q: Do I Need to Staircase to Sell My Home?
A: No, you can sell your share at any time, following sale provisions in your lease. Notice to the landlord and allowing time for buyback or nomination is necessary.
There are numerous advantages to staircasing, providing financial security. To ensure accurate advice, it’s crucial to instruct a conveyancer specializing in this area. At Prince Evans, our expert team is ready to provide assistance.
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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.
