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Staircasing is the process by which the owner can gradually increase their ownership percentage and reduce the rent paid to the Housing Association. The ultimate goal for many shared owners is to staircase to 100% ownership, effectively converting their shared ownership property into a conventional freehold or leasehold property.
While staircasing is a fundamental feature in almost all shared ownership schemes, it's important to note that not all schemes offer identical staircasing terms or options and the specific staircasing rights, restrictions, and procedures will be defined in the shared ownership lease, which can vary. Administrative processes, timeframes, and costs associated with staircasing can differ. Always check your specific lease terms and consult with your housing provider to understand the exact staircasing provisions applicable to your property.
Common types include :-
Standard Shared Ownership Schemes - the majority of shared ownership properties offered through housing associations and under government-backed schemes include staircasing provisions. However, the specific terms can vary between providers and schemes.
Rural Exception Sites and Designated Protected Areas - properties in certain rural areas may have restricted staircasing options, typically capping maximum ownership at 80% to ensure the property remains affordable for future buyers in that community.
Older Shared Ownership Schemes - some older schemes (pre-2021) may have more restrictive staircasing terms, including higher minimum increments or limitations on the number of staircasing transactions permitted.
Newer Shared Ownership Model (from 2021) - the government introduced a new model of shared ownership that includes more standardised staircasing terms, including the option to staircase in 1% increments for the first 15 years.
Simultaneous Staircasing - in some cases, it's possible to increase your share at the same time as moving from one shared ownership property to another.
Downward Staircasing - some housing associations offer the option to reduce your share if you face financial difficulties. This is relatively rare and subject to specific criteria and agreement from the housing association.
When staircasing, you purchase additional shares based on the property's current market value, not the price you initially paid. This means:
If property values have risen, the additional shares will cost more than your initial shares.
If property values have fallen, the additional shares will cost less than your initial shares.
Reduced Rent Payments: Each additional share purchased reduces the rent paid to the housing association. Staircasing to 100% eliminates rent payments entirely.
Building Equity: Increasing your stake means you own more of a valuable asset.You'll benefit more from any appreciation in property value.
Greater Control: As your share increases, you typically gain more control over the property. At 100% ownership, many restrictions in the shared ownership lease are removed.
Easier Selling Process: A property with a higher percentage of ownership may be more attractive to buyers. 100% ownership means you can sell on the open market rather than through the housing association.
Financial Risks - Property values can rise or fall, affecting the cost of additional shares. If values rise significantly, staircasing becomes more expensive. If property values fall significantly, you might end up in negative equity, making staircasing financially unviable. Each staircasing transaction involves costs such as valuation fees, legal fees, and mortgage arrangement fees.
Mortgage Considerations - you may need to remortgage or secure additional borrowing. Interest rates and lending criteria may have changed since your initial purchase.
Lease Restrictions - check your lease for any staircasing restrictions or conditions. Some leases limit the number of staircasing transactions you can make.
Time Constraints - the valuation is typically valid for only 3 months, creating a time pressure to complete the transaction.
Initial Research and Preparation - review your lease to understand your staircasing rights and any restrictions. Contact your housing association to express interest in staircasing and request their procedure. Consider your financial position and, if necessary, speak to a mortgage advisor about your borrowing options. Budget for all associated costs (valuation, legal fees, mortgage fees, etc.).
Formal Application- submit a formal staircasing application to your housing association. Pay any administration fee required by the housing association. The housing association will acknowledge your application and outline next steps.
Valuation - the housing association will instruct an independent RICS (Royal Institution of Chartered Surveyors) qualified surveyor to value the property. You'll need to pay the valuation fee (typically £300-£800 depending on the property). The valuation determines the current market value of the property and thus the cost of additional shares. This valuation is usually valid for 3 months, creating a timeframe for completion.
Financing - once you know the cost of the additional shares, finalise your financing arrangements. This may involve extending your existing mortgage or applying for a new mortgage and/or using savings or other funds.
Legal Process - solicitor will liaise with the housing association's solicitors, handle the conveyancing process, deal with any mortgage lender requirements, prepare the documentation to transfer the additional share, handle the financial transactions. The transaction will then be registered with the Land Registry and if you've staircased to 100%, your lease will be updated or replaced.
Stamp Duty Land Tax (SDLT) Assessment - your solicitor will advise whether SDLT is payable on the additional share. SDLT rules for staircasing can be complex and depend on various factors including when the property was purchased and whether it's your first property
When selling a shared ownership property, there are important implications regarding staircasing that both sellers and potential buyers should understand.
If you're selling without having staircased to 100%, you'll typically need to offer the property first to buyers nominated by the housing association (known as the 'nomination period'). Your buyer will be purchasing the same share percentage that you currently own. The sale price will be based on the market value of your share, not the entire property. If you've staircased to full ownership, you can generally sell on the open market without restrictions
However, some leases may contain covenants that remain in place even after 100% staircasing. Even if you've staircased to a significant percentage but not 100%, the housing association typically retains pre-emption rights. This means they have the right of first refusal to buy back your share
In most cases, a buyer purchasing a resale shared ownership property can immediately begin the staircasing process if they wish. There is typically no mandatory "waiting period" before new owners can staircase. However, given the costs involved in both purchasing and staircasing, most buyers choose to settle into ownership before considering staircasing.
We have 1 of the UK's largest, most experienced and highly rated team of conveyancers, with many lawyers who specialise in shared ownership.
As with any significant financial and legal transaction, seeking professional advice tailored to your specific circumstances is essential.
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Solicitor - Conveyancing and Shared Ownership specialist
Subarna joined the firm as a paralegal in 2019 and after subsequently completing her training contract, she has now qualified into the Shared Ownership department of the Bexleyheath office.
Subarna has a vast amount of experience in residential p...
