What is staircasing?
Once you have purchased the initial share of your home, you can usually buy more shares over time. This is called staircasing, and it allows you to increase how much of your home you own.
The greater the share you own, the less rent you will pay to Hastoe. If you staircase up to 100%, you become an outright owner and pay no rent. When you staircase, the cost of the extra shares is based on the current market value.
For example: If your home is valued at £200,000 and you want to buy an additional 25% share, the purchase price will be £200,000 x 25% = £50,000.
What are the benefits of staircasing?
- You reduce the amount of rent you pay to Hastoe.
- If you own your home outright, you can sell it on the open market using an estate agent of your choice, to any buyer. You do not have to sell to someone who meets shared ownership lease criteria.
- As the outright owner, you’ll receive 100% of the sale price, including any increase in value since you bought it.
Is there a reason why I would not be able to staircase?
Hastoe will not allow a shared owner to complete on the purchase of further shares if they have service charge or rent arrears.
Some leases restrict the purchase of additional shares, meaning we may be unable to facilitate staircasing in accordance with the lease terms.
Additionally, if your property is in a rural area with a maximum ownership cap of 80%, we generally advise not to staircase more than 50% ownership. This is because it could lead to delays when you come to sell. Any future buyer must purchase the same share you own and will need to pass the required affordability assessments for that level of ownership.
How do I staircase?
Step 1 – Contact the sales team
Email your full address and contact details to sales@hastoe.com. We will confirm whether you can staircase and the maximum share you can purchase.
Step 2 – Arrange a RICS valuation
You will need to obtain a valuation of your home from a Registered Institute Chartered Surveyor (RICS). We can provide you with a list of surveyors, although you may choose any RICS certified surveyor.
The estimated cost of a RICS valuation is around £300, although this varies by surveyor.
The valuation report is valid for a three-month period. If your staircasing transaction does not complete within this period, Hastoe will require an updated valuation which may incur an additional valuation fee. This can normally be organised at a reduced fee as the original surveyor does not need to revisit the property. If your home’s value has changed, the value of the additional share you are buying will be adjusted accordingly.
Step 3 – Complete the authorisation form
If you are happy to proceed, you will need to complete Hastoe’s Staircasing Authorisation Form and appoint a solicitor. We recommend using the solicitor who originally dealt with your purchase as they are most likely to have your property details. If this is not possible, we can provide you with a list of solicitors.
We always recommend you select a solicitor who offers a fixed fee for their services and you ask for a quote before using them. It is important to choose a solicitor with specific knowledge and experience of shared ownership leases. Remember that you pay for your solicitor’s time, so the more you engage with your solicitor, the higher the charge is likely to be.
Step 4 – Completion
Congratulations! You will now own a larger share or the full 100% of your home. We will update your account on our systems to reflect your new ownership share, refund any paid rent owed, send confirmation of your new rent and service charge amounts, and/or close your account if you have staircased to 100%.
If you become the 100% owner of your house, you will no longer be covered under our buildings insurance policy from the date your staircasing transaction completed. You must ensure that you have a building insurance policy in place at completion. If you become a 100% owner of a flat or apartment, you will still be covered under our block buildings insurance policy.
Frequently asked questions
How much can I staircase?
The minimum percentage is 5% or 10% depending on your property lease.
If your home was built after April 2021, you may have the option to buy a 1% share each year during the first 15 years that you own your home. This process is different to standard staircasing as the price of the 1% share is based on the original full market value adjusted up or down each year in line with the House Price Index (HPI). Please contact the sales team to check if your home is eligible for 1% staircasing.
What other costs are involved?
- You will need to cover the solicitor’s fees to change your existing lease.
- In certain circumstances you may need to pay stamp duty. Your solicitor will advise you whether this applies.
- If you remortgage to buy the additional shares or secure a better interest rate, you may need to pay a lenders’ valuation fee, a mortgage arrangement fee and penalty charges to your existing lender if you re-mortgage before the end of the product end date or any fixed rate period. You should discuss this with your lender or financial advisor before applying to staircase.
- We strongly recommend a financial assessment with an Independent Financial Advisor (IFA) to check affordability and mortgage eligibility. Hastoe can provide a list of IFAs experienced in sourcing mortgages for shared ownership properties. This can help avoid paying for a valuation if it’s unlikely a mortgage would be approved.
What if I have made home improvements to my home?
When your home is valued for staircasing, the valuation is based on the current market value, excluding any approved home improvements you have made. General home maintenance, repairs and redecoration are not classed as improvements and usually will not increase the value of your home. Structural changes such as additional bedrooms or extensions may be considered home improvements that increase the value of your home. Please remember that you need to request permission and written approval from Hastoe before carrying out any major improvements to your home.
What happens when I become the outright owner?
Once you staircase to 100%, you will no longer pay Hastoe any rent.
However, if you are the leaseholder of a flat, you are still required to pay your service charge and management charges, as Hastoe will remain the freeholder of the apartment block.
If you own a house, the freehold of your home will be transferred to you. Once this has taken place, you will no longer be charged for buildings insurance. In some cases, you may still have to pay a service charge or estate management charge if you live on a Hastoe estate.
Regardless of whether you live in a flat or a house, once you own 100%, you are free to sell your home on the open market using an estate agent. Please note that your lease may restrict you from selling within three months of completing your staircasing purchase.
For further information on staircasing, please contact the sales team at sales@hastoe.com
