If you own a shared ownership home you may be entitled to acquire more shares in your home. The minimum percentage the owner can hold is 25%. If you are in a position to buy extra shares in your home this is done through a process called staircasing.
Buying More Shares in your Shared Ownership Home
Staircasing is just the term used in the lease to describe the process of buying additional chunks of the property. Every chunk will usually need to be bought in 10% increments. Most leases allow you to staircase to 100% ownership, but depending on the type of shared ownership lease you may be limited to a maximum of 75% ownership to make sure the property remains under a shared ownership.
If you intend to staircase using your own money and you don’t need a mortgage, you may not need to instruct a Conveyancer if you feel confident you can complete the process yourself. If you are getting a mortgage in order to buy more shares, your mortgage lender will usually insist that you instruct a Conveyancer.
There are a limited number of mortgage lenders that will lend on shared ownership properties. If you are not going to obtain 100% of your property at the end of the transaction, you must ensure your mortgage lender is aware of this before you progress with a loan application and start incurring costs.
To apply to buy more shares you will need to serve notice on your landlord. The easiest way to proceed is to contact your landlord and ask them if they have any standard procedures for staircasing. They will usually be able to provide you with some information and may ask you to complete a form and pay a fee in place of serving a notice.
You will need to get a valuation carried out by a qualified valuer who is a member of the Royal Institute of Chartered Surveyors (RICS). The valuation report can only be relied upon for 3 months as the property value could have increased or decreased after 3 months. So if you haven’t completed the transaction in 3 months, you may need to get another valuation.
You will need to send your valuation to your landlord and get their approval of the value. Once the value has been agreed you can buy shares based on this value. Your landlord will confirm the cost and may instruct a Solicitor to prepare the paperwork.
Memorandum of Staircasing
The purchase of the share will be noted on a document called a Memorandum of Staircasing. The document will be signed by you and will be signed by your landlord on receipt of payment.
The Memorandum of Staircasing will be your evidence that you bought more shares. You should keep this safe as you may require the document when you arrange further staircasing or when you sell your home.