Staircasing is an attractive incentive for current shared ownership owners to ascertain further shares or full ownership of their property.
The larger you make your share, the less rent you’ll pay on the decreasing remaining share your Housing Association owns and, of course, the larger equity stake you’ll create for the time when you want to sell up!
When you first purchased your share of the property you may have not paid any stamp duty or paid it in full and your solicitor will need to calculate what you will be liable for when you staircase.
If you decide to staircase to more than 80% you’ll have to pay more stamp duty if you didn’t pay it in full previously, so make sure you allow an adequate amount of budget to cover this.
The process might seem a little complicated so to simplify matters we’ve nailed down some top tips for getting your staircasing moving along efficiently from the outset while avoiding unnecessary hiccups.
Tip #1 – Inform the Housing Association you want to staircase
Housing associations have procedures in place in order to accommodate the staircasing of their properties and will send you the forms you need to complete prior to starting to staircase.
Tip #2 – Obtain a valuation from a RICS surveyor
In order for your Housing Association to evaluate their outstanding share, the current value of the property and how much they will expect you to pay for the additional share you wish to purchase, you will need to obtain a RICS valuation. You cannot use an estate agent or online estimation due to the requirements your Housing Association sets.
Tip #3 – Calculate the costs for staircasing
Once you have received the documentation from the Housing Association and completed your RICS valuation you will need to decide how you are going to fund the staircasing. The majority of home-owners will remortgage in order to pay for the remaining share and allow for there to be only one charge outstanding on the property.
Tip #4 – Get your finances in place
Once you’ve budgeted for the costs associated with your staircasing, you will need to contact either a lender or mortgage broker in order to start your remortgage application or obtain the funds you will be using along with your proof of ID and address. This is an important step as your valuation will have a 3-month time limit after which it can no longer be used.
Tip #5 – Instruct a staircasing solicitor
You will reach a point when you need to start looking for a suitable solicitor experienced in shared ownership staircasing to instruct to help you buy your extra share. Your mortgage lender and Housing Association will need to know which solicitor you’ve instructed. It’s important that you not only instruct a solicitor who is on the mortgage lender’s panel of the lender you will be remortgaging with but also experienced with staircasing as the process is more complicated than that of a normal purchase.
Before you get worried about what to do or if you have taken the right first steps, tick off the above tips and you will be in the best possible position so you ‘hit the ground running’ and ensure you haven’t missed anything out.
Staircasing can be a stressful time if you don’t have all five things completed or have a solicitor who isn’t able to support you with answers to the questions you will have throughout. Make sure to do your research, get your figures together and make contact with the right people.
By Marcus Simpson
Digital Marketing Manager