Staircasing

A major benefit of buying through Shared Ownership is that you have unlimited flexibility in when you take the next step. You get to choose when you're ready to buy more shares in the property, with the end goal being 100% ownership. This process of buying shares is commonly known as 'staircasing' and it's important you understand what goes into the process before you get started.

What is Staircasing?

Once you've bought a property through Shared Ownership and lived there for a set amount of time (usually outlined in your lease), you have the option to buy more shares in the property. For example, if you bought 50% of the property at the time of purchase, you could buy an additional 25% in the future and you'd own 75% of the property.

This process of buying more shares in a Shared Ownership is known as staircasing and allows you to build up your share of the property until you have full ownership.

Obviously, the main benefit of staircasing is that as you buy more shares, you start paying less rent on the remaining share owned by the housing association and you get one step closer to full home ownership.

You can staircase as many times as you like - provided you're meeting the minimum requirements of purchased share - although it's important to remember that each stage of staircasing comes with its own costs. 

What are the Benefits of Staircasing?

There's a wide variety of benefits to increasing how much your Shared Ownership home you own, with the main positives being: 

If you increase your share of the property, your mortgage payments may go up but your rental payments on the other shares will decrease, ensuring an affordable route to full home ownership.

Once you reach 100% ownership, you no longer pay any rental payments. 

As you build your ownership of the property, you benefit more from any property price increases that your home experiences. Owning 100% of the property makes the selling process much easier and ensures that you receive the full benefit of house prices going up. 

Staircasing to 100% means you gain access to a wider selection of mortgage products and won't be restricted to a Shared Ownership mortgage. 

What are the Different Types of Staircasing?

When you start considering staircasing in a Shared Ownership property, you may see several different 'types' of staircasing mentioned. Here's what they mean: 

What is Interim Staircasing?

Interim staircasing is the process of purchasing property shares that increases the amount owned by the buyer, excluding achieving 100% ownership. For example, staircasing from 25% to 50% ownership. After an instance of interim staircasing, the buyer remains a shared owner.

Prior to an instance of interim staircasing, a valuation is carried out and the value of the share is based on the valuation. Once the share is purchased, there is a simultaneous reduction in the amount of rent that the shared owner pays to the housing association, since you only pay rent on the share you don’t own.

This is the most common form of staircasing and you can build up your overall percentage of ownership as much or as little as you want.

What is Final Staircasing?

Final staircasing is the process of buying the final segment of shares that takes you to full ownership.

Once you become the full owner - if the property is a house and the previous owner is a housing association - the freehold or the leasehold interest will be transferred to you.

If the property is an apartment, the property remains a leasehold. The payable rent, however, is still reduced to zero. Certain elements of the lease also change to ensure it’s no longer considered a Shared Ownership lease. Subject to the terms of the lease or transfer, service charges may remain payable.

The amount that you pay - similar to interim staircasing - is based on the market value of the property which is determined by the valuation.