Staircasing is the process that a shared owner completes in order to purchase additional shares in their home.
A lease may state the minimum percentage that can be purchased, or a maximum number of times that staircasing can take place. If the lease does not state these, we will follow the model lease in the Capital Funding Guide. Information on this can be found here.
Most shared ownership leases allow staircasing up to 100% ownership, but some specify a maximum allowed percentage.
The higher percentage that a shared owner owns in their home, the less rent will be payable to Soha. At 100% ownership, the owner will become a leaseholder or freeholder rather than a shared owner and no rent will be payable. There may still be additional charges such a service charges or estate charges that are applicable to that property or development.
Leases vary on the terms of staircasing. Some require purchases of 10% or more at any time whilst some older leases insist on a minimum of 25%. Newer leases may allow 5% staircasing. The most recent model lease allows 1% purchases each year for the first 15 years.
Staircasing is only available if there is a clear rent account (this includes service charges and any major works bills).
The staircasing process
Soha should be notified of the intention to staircase and will check the property history and lease information.
A RICS valuation will be required (to be provided by the shared owner) and this will dictate the price of the shares.
The purchase of extra shares must complete within 3 months of the date of the RICS valuation. For staircasing on sale of the property, 6 months is allowed.
Soha reserve the right to extend the validity of the RICS valuation for a limited period should there be a delay in the process, otherwise a new RICS valuation would be required once the time has elapsed.
Should the shared owner cancel the purchase after Soha have instructed their solicitors, an administration fee of £250 plus VAT will be charged to the shared owner to cover Soha’s costs.
Simultaneous sale/ staircasing
Should the lease allow, it may be possible to sell the home with outright ownership and staircase to 100% simultaneously. This is often referred to as a back-to-back sale. We can advise if this is possible. Please contact the Homeownership Team to discuss this further.
Downward staircasing
In exceptional cases, Soha may agree to buy back shares in a property from shared owners. This is known as reverse or downward staircasing.
When can I buy more shares?
Your lease sets out when you can buy more shares, but generally you have to wait a year from your first purchase.
Will my rent and service charges change?
Your rent is calculated on the percentage of your home that we own – we’ll calculate the change and let you know what your new rent payment will be.
If you are purchasing less than 100%, your service charges will stay the same as there will be no change to the service you receive.