Shared ownership allows you to purchase a portion of a property while paying rent on the rest. It allows individuals or families to gradually increase their ownership stake in a property. Over time, as you get better and better off financially, you can buy more shares, and eventually you’ll get 100%. This process is known as “staircasing.”
If you’re considering buying a home through shared ownership in the UK, you’re on the path to affordable homeownership. In this article, we’ll guide you through the steps of staircasing to help you achieve full ownership of your shared ownership property.
Considerations Before Staircasing
Future Financial Planning: It’s crucial to assess your long-term financial goals and determine how shared ownership fits into your broader homeownership plan.
Credit Rating: A good credit rating is vital when securing financing for staircasing.
Make sure that your credit history is is in a favourable condition.
Insurance: As you transition towards full ownership, consider homeowner’s insurance to protect your investment.
Let’s now take a closer look at the step by step process of staircasing:
Assess Your Finances
Before beginning the staircasing process, take a close look at your finances. Determine whether you’re in a stable financial position to increase your ownership share. Consider the main factors like your income, expenses, and savings. Additionally, think about the costs involved in the staircasing process, such as valuation fees, legal fees, and mortgage arrangement fees. Having a clear financial picture is crucial for a successful staircasing journey.
Check the Terms of Your Lease
Review your shared ownership lease agreement to understand the terms and conditions related to staircasing. The lease will outline the specifics of the process, including the minimum and maximum share you can purchase in one go. Typically, you can staircase in increments of 10% or more. Understanding these terms is essential to plan your staircasing steps effectively.
Get a Current Property Valuation
To determine the current market value of your shared ownership property, you’ll need a property valuation. A professional valuer will assess your home, taking into account its condition, location, and recent property sales in the area. The valuation is a crucial step as it establishes the purchase price for the additional shares you wish to buy.
Notify the Housing Association
Once you’ve obtained the property valuation, you should inform your housing association of your intention to staircase. They will explain the process to you and provide you with all the required documentation. The housing association will also have a designated timeframe for completing the staircasing process, which is typically eight weeks.
Secure Financing
If you don’t have sufficient savings to buy the additional share outright, you’ll need to secure financing. This can be in the form of a mortgage or savings. You may want to consult a mortgage advisor to find the best mortgage deals for your staircasing needs. Keep in mind that lenders may have specific criteria for shared ownership staircasing mortgages.
Legal Aspects
You’ll need a solicitor to handle the legal aspects of staircasing. They will ensure the new share ownership is correctly registered and that all legal requirements are met. Your solicitor will also handle the necessary paperwork, including the Transfer Deed and the Notice of Staircasing.
Complete the Staircasing Process
Once all the paperwork and financing are in place, you can complete the staircasing process. This involves purchasing the additional share based on the current market valuation. The housing association will issue a new lease reflecting your increased ownership percentage, and your rent will be adjusted accordingly.
Post-Staircasing Obligations
After staircasing, you’ll have full ownership of your home. Basically, you’re in charge of everything related to the property, like upkeep, repairs, and insurances. It’s necessary to plan for these ongoing costs.
Enjoy Full Homeownership
Congratulations! You’ve successfully reached 100% ownership of your shared ownership property. You can now take advantage of all the perks of being a homeowner, like being able to sell your house for cash if you want.
In conclusion, shared ownership and the staircasing process offer an accessible route to homeownership in the UK. By carefully considering your finances, understanding the terms of your lease, and following the steps outlined in this article, you can steadily progress towards 100% ownership of your shared ownership property, achieving the dream of full homeownership.
