Shared ownership has become a popular route for many people looking to get on the property ladder without needing a huge deposit. It allows buyers to purchase a share of a home—usually between 25% and 75%—and pay rent the remainder to a housing association or provider.
One of the most important features of shared ownership is staircasing—the process by which you can gradually increase your share of the property over time. But how exactly does staircasing work, and what are the pros and cons of doing it?
In this article, we’ll explore the ins and outs of staircasing, explain how it works, outline the benefits and costs, and offer practical tips for anyone considering this step. Whether you’re currently in a shared ownership home or are considering buying one, or even exploring alternatives through letting agents in Uckfield, this guide will help you make informed decisions.
What Is Staircasing?
Staircasing refers to the process of increasing your ownership share in a shared ownership property. Over time, you may be able to buy additional portions—usually in increments of 10% or more—until you potentially own 100% of the property.
For example, if you initially purchased 40% of your home, you could staircase to 60%, 80%, or all the way to full ownership, depending on your financial circumstances and the terms of your lease.
Once you reach 100% ownership, you no longer must pay rent to the housing association, though you may still be responsible for ground rent and service charges if the property is leasehold.
When Can You Start Staircasing?
Most shared ownership leases allow you to staircase at any time, although some housing providers require that you have lived in the property for a minimum period—typically 12 months—before making your first application.
It’s also essential that your mortgage lender approves your staircasing application, as buying a bigger share usually means increasing your mortgage or paying in cash.
If you’re unsure when you’re eligible to use a staircase, your first step should be to check your lease agreement or speak to your housing association.
How Much Does Staircasing Cost?
While the idea of staircasing is straightforward, it comes with associated costs that buyers should prepare for. These typically include:
- Valuation fees: A RICS-accredited surveyor will need to determine the current market value of the property, as this will dictate the cost of your new share.
- Legal fees: You’ll need a solicitor to handle the legal side of the transaction.
- Stamp Duty: Depending on your circumstances and whether you opted to pay Stamp Duty in stages or upfront at the initial purchase, you may owe more at the staircasing stage.
- Mortgage fees: If you’re increasing your loan amount, you may face additional charges from your lender.
- Administration fees: Charged by the housing association for processing your staircasing application.
Be sure to request a full breakdown of expected costs before starting the process and consider whether the financial benefits of staircasing outweigh the upfront expenses.
Partial vs Full Staircasing
When staircasing, you can choose between partial and full staircasing.
Partial Staircasing
This means increasing your share incrementally—e.g., moving from 40% to 60%. While this reduces your monthly rent (because you’re now renting a smaller portion), you still pay a percentage of the market rent on the remaining share.
Full Staircasing
When you step up to 100%, you own the property outright and no longer pay rent to the housing association. However, leasehold charges (if applicable) such as service charges, ground rent, and maintenance contributions may still apply.
Owning the property outright also gives you more freedom, including the ability to sell on the open market or remortgage with fewer restrictions.
Pros of Staircasing
Staircasing can be an excellent way to take further steps towards full property ownership. Key benefits include:
- Reduced rent: As your ownership share increases, your rent decreases.
- Increased equity: You build more equity in your home, which could be useful when moving or remortgaging.
- Greater control: Full ownership allows you to make more decisions about the property.
- Higher resale value: The more of the property you own, the more you’ll benefit from any increase in its value.
For tenants working with letting agents in Uckfield and considering a switch to shared ownership, staircasing can provide a flexible route to long-term homeownership.
Things to Consider Before Staircasing
Staircasing may not always be the best option for everyone. Here are a few things to keep in mind:
- Affordability: Can you afford the new mortgage payments or cash outlay, plus associated costs?
- Lease terms: Some leases have restrictions or limitations on staircasing, particularly in rural areas or specialised schemes.
- Valuation risks: If the property’s value has increased significantly, buying additional shares becomes more expensive.
- Future plans: If you’re planning to move soon, staircasing might not provide enough short-term financial benefit to be worthwhile.
It’s often a good idea to speak with a financial adviser or mortgage broker before making a decision.
Selling a Shared Ownership Property
If you decide to move before staircasing to 100%, you’ll typically need to offer your share back to the housing association first. They may have ‘first refusal’ rights for a set period (usually 8–12 weeks).
Once you own the property outright through full staircasing, you can sell it on the open market just like any other home.
Engaging with local experts like letting agents in Uckfield can help you market the property effectively and navigate the sales process with minimal stress.
Tips for a Smooth Staircasing Process
- Check your lease: Understand the rules specific to your property and provider.
- Get a mortgage update: Talk to your lender or broker about how much more you can borrow, if needed.
- Save for costs: Ensure you budget for valuation, legal, and other associated fees.
- Work with professionals: Instruct a solicitor experienced in staircasing transactions.
- Ask for guidance: Don’t hesitate to contact your housing provider for a step-by-step explanation.
Conclusion: A Flexible Path to Full Ownership
Staircasing is a valuable option within the shared ownership scheme that allows homeowners to increase their stake in a property over time, ultimately reaching full ownership if desired. While it involves costs and careful planning, it offers greater control, reduced rent, and long-term equity benefits.
For renters exploring the transition into homeownership, particularly in areas where property values are on the rise, shared ownership and staircasing can be an effective solution. Local professionals—like experienced letting agents in Uckfield—can help you understand your options, plan your finances, and make confident, informed decisions at every stage of the property journey.
If you’re considering staircasing or want to learn more about shared ownership, take time to explore your options carefully—and don’t hesitate to seek expert advice to ensure you’re making the right move for your future.