Guide to staircasing. How to buy further shares in your home
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What is staircasing?
Once you have completed your purchase you can buy further shares in your property. This process, known as staircasing, enables you to own a greater proportion of your home.
How do I staircase?
The first stage in this process is for Hastoe to obtain a valuation from a Registered Institute Chartered Surveyor (RICS), for which you pay the fee. These usually cost in excess of £200; please contact the sales team for a quote. The valuation is valid for three months, and you must complete your staircasing transaction within this period, otherwise the property must be re-valued. Please remember that if the value has increased then you will have to proceed at a higher value.
You will then need to appoint a solicitor to handle the legal documentation. Once you have completed the transaction your rent account, if applicable, will be adjusted accordingly. If you have taken out a mortgage for the share, you will pay an increased amount to your lender from the day of completion.
Do I have to staircase?
You don't have to staircase - it is entirely up to you. Most people who live in shared ownership properties staircase to reduce the rent they are paying. As the rent is paid on the share that Hastoe owns, by purchasing further shares the rent is reduced. When you come to sell your home, the greater percentage you own, the more profit you will make if the value of your home has increased
How many times can I staircase?
Each lease has different variations of the maximum you can staircase to. Some leases restrict staircasing to a maximum of 80%. Before you start the process of staircasing please ask the sale team if you can staircase.
Who else needs to be involved?
An Independent Financial Advisor (IFA), mortgage lender and solicitor.
We strongly recommend that you undertake an independent financial assessment through an IFA to assess your situation and ensure you are eligible for a mortgage. Hastoe can provide you with a panel of IFA’s who have experience in sourcing shared ownership mortgages.
If you are increasing your mortgage to staircase, you will need to contact your lender direct. If you want to move your mortgage to a new lender, because of a better interest rate, this is known as 're-mortgaging'. Hastoe can provide you with details of IFA's who have experience in shared ownership lending.
An increase in the share of your property will involve changes to your existing lease. This means you will need to instruct a solicitor. Hastoe can provide you with details of solicitors that are experienced in the staircasing process.
What are the costs involved?
There will be costs involved, including, the valuation fees, legal fees, mortgage arrangement fees and stamp duty (if applicable). There may also be further costs, charged by your mortgage lender. Please note Hastoe will charge an administration fee of £50 to cover our legal fees and you should inform your solicitor.
Do I benefit from the improvements that I have made to the property?
If your improvements have added value to your home (and not all improvements will do this), they will be disregarded from the valuation. The purchase price of your additional share will therefore not include any increase in value caused by works you have carried out.
What happens if I staircase to 100%?
Once you have staircased to 100% you will no longer pay Hastoe any rent. If you own a flat you will remain a leaseholder and you are still required to pay your service and management charges as well as ground rent.
If you own a house, the freehold of your home can be transferred to you when you have staircased to 100%. You will need to serve notice to Hastoe requesting the freehold of the property. There is no charge for this transfer; however you will have to pay your legal costs. Once this has taken place, you will no longer be charged for buildings insurance.
In some cases you may still have to pay a service charge to Hastoe if you live on an estate and are responsible for some of the communal cost. Regardless of whether you live in a flat or a house, once you have staircased to 100%, you are free to sell the property on the open market. If you would prefer, Hastoe can also sell your property for you. We charge competitive fees compared to many high street estate agents. Please note that your lease restricts you from selling your property for three months following final staircasing.
Is there any reason why I would not be able to staircase?
Hastoe would not allow a leaseholder to complete on the purchase of further shares if they are in either service charge or rent arrears. Some properties have a restriction on staircasing and details can be found in your lease.
Where can I get further information?
If you would like an informal chat about buying further shares contact the sales team: 0800 783 3097 or email@example.com