Staircasing: Your Guide to Owning More of Your Shared Ownership Home
If you’ve bought a Shared Ownership home, you may have come across the term staircasing perhaps in your lease, from your housing provider like Southern Housing New Homes, or even from neighbours who’ve already done it. But what exactly does it mean, and how could it benefit you? Let's break it down in simple terms.
What is Staircasing?
Staircasing is essentially the process of buying more shares in your Shared Ownership home over time. When you first purchase a Shared Ownership property, you buy a percentage (typically between 25% and 75%), while paying a subsidised rent on the portion you don't own.
Think of it like this: you start with owning a single slice of pizza, and staircasing lets you buy more slices until, eventually, you could own the whole pizza.
How does the process work?
The process is more straightforward than you might expect:
1. Contact your housing provider to let them know you're interested in buying more shares
2. Get your home valued by an independent RICS-certified surveyor to determine its current market value
3. Choose the percentage you want to purchase next. At Southern Housing, most of our homes allow you to start staircasing by purchasing an additional 10% or more each time you do so. Some of our homes have been sold using the new Shared Ownership model, which allows you to purchase 1% a year for up to 15 years. It’s always worth checking which model applies to your home, so you know exactly how many shares you can purchase each time.
4. Arrange your finances. This might mean extending your existing mortgage or finding a new one.
5. Complete the legal work with a solicitor who specialises in Shared Ownership.
Each housing provider has their own specific process, but these are the basic steps you'll follow. The great news is that you can staircase multiple times until you own 100% of your home (depending on the terms of your lease).
What are the Benefits of Buying More Shares?
At Southern Housing, most of our homes allow you to start staircasing by purchasing an additional 10% or more each time you do so. Some of our homes have been sold using the new Shared Ownership model, which allows you to purchase 1% a year for up to 15 years. It’s always worth checking which model applies to your home, so you know exactly how many shares you can purchase each time.
Less Rent to Pay
Every time you increase your share, your rent decreases proportionally. For example, if you initially owned 25% and buy another 25%, your rent would be cut in half because you now own 50% of your home.
More Investment in Your Future
The larger your share, the more you benefit from any increase in your property's value over time. This means you're building more equity – real value that belongs to you.
More Freedom and Control
As your share grows, you may find you have more flexibility in making changes to your home. And once you reach 100% ownership, you’ll no longer pay rent on any part of your property.
Simultaneous Staircasing
Many Shared Ownership residents aren’t aware of an alternative approach called simultaneous staircasing. This lets you purchase the remaining shares in your home at the same time you sell the property to a new buyer.
When you find a buyer, instead of just selling your share (let's say 50%), you can arrange to purchase the remaining share from the housing provider and immediately sell the entire 100% to the new buyer. This opens your potential market to include all buyers, not just those looking for Shared Ownership homes.
The best part is that you don't need to find the money to purchase the remaining share yourself - the funds from your buyer cover it. Your solicitor handles all the legal complexities, making the process seamless for you.
How do I Take the Next Step?
If you're considering staircasing, start by reaching out to your housing provider like Southern Housing New Homes, to understand their specific process and any associated costs. They can guide you through each step and help you determine if now is the right time to increase your share.
Interested in learning more about our available Shared Ownership homes? Explore current homes now and discover how Southern Housing New Homes can help you find your perfect match.