How can I own more of my property?
If you're a shared owner, you are entitled to increase the equity share in your home by purchasing additional shares. This process is called staircasing.
Buying another share
Your lease states the extra shares you can buy. We will allow you to buy extra shares of at least 10%. This is called ‘interim staircasing’.
If you buy all the shares in your home, you will no longer be a shared owner. We refer to this as ‘final staircasing.’
Valuing your home
The amount you pay for the extra share or shares in your home depends on the current value of your home. For example, if your home is worth £200,000 and you want to buy an extra 25%, you will pay 25% of £200,000, which is £50,000.
If you want to staircase, you will need to have your home valued and we must agree on the valuer that is used. You can ask us for a list of approved valuers.
Valuations are valid for three months, therefore the staircasing transaction should take place within this timeframe to avoid the value increasing, as this would affect the cost of additional shares.
The valuation will consider the effect of alterations you have registered with us.
What are the costs of staircasing:
- The valuation fee.
- Your solicitor’s fees.
- The cost of the extra share of your property.
- SBHA administration costs (refundable on completion).
- The costs of arranging a re-mortgage or a new mortgage if necessary.
- Stamp duty (if applicable)
- Leaseholder enquiry fee (if applicable)
Any rent or service charge arrears on your account must be paid at the same time as you complete your purchase of the extra shares(s).
If you have arranged to increase your mortgage to pay for the extra share, you must send us a copy of your mortgage offer as we will need to approve it.
How long will it take?
Staircasing is usually straightforward and you can complete it within eight weeks. You can help by having your mortgage offer ready and staying in contact with your solicitors to make sure everything is progressing.
You will pay less rent if you buy extra shares in your home. For example if you own 50% of your home and decide to buy an extra 25%, you will pay 50% less rent. Your new rent level will be calculated using the following formula:
New rent = rent before staircase x % owned by SBHA after staircase divided by % owned by SBHA before staircase.
Some leases have a minimum rent. If you are affected, we will tell you what it means for you.
If you ‘final staircase’ and own all the shares in your property you will stop paying rent to us. But if you live in a flat, you will still have to pay service charges.
If you live in a house, you will have to arrange your own buildings insurance after three months, but you will still have to contribute for shared facilities on an estate such as gardens and management costs.
If you live in a house, and buy all the shares, you stop being the leaseholder and become the freeholder. This means we will no longer own any part of your home. In most cases you become the freeholder three months after you complete the final staircasing. Your solicitor is responsible for making sure this happens. You will still be liable to pay rent, insurance and our management fee until you do this.
If you live in a flat, you continue being the leaseholder even after you buy all the shares in your home. You will still have to pay a service charge to us or your freeholder, and if we are not your freeholder you will (in practically all cases) still have to pay a ground rent to your freeholder.
Note: In shared ownership leases granted over the last few years there are new provisions effective after you own all of the shares in your home these are the ‘right of pre-emption.’ What this means is that for 21 years after you have bought all the shares in the property, every time that you (or someone who buys from you) want to sell the property or sub-let it for more than 21 years, you must first offer it to SBHA. We have the choice of either buying the property back or finding a buyer for it.
The price which you will receive is the market value of the property as assessed by a valuer.
When you want to buy all of the shares in your property your solicitor will tell you whether your property will be subject to the right of pre-emption and provide you with full details of it.
Flexible tenure (down-staircasing)
In some circumstances we will consider buying back some of your shares. The rent you pay after we have bought the shares will increase to reflect our increased equity.
You do not have the right to make us buy back some of your shares; it is entirely within our discretion.