Staircasing explained
Depending on which type of lease you have, there are different rules around buying more shares in your home.
The cost of your new share will depend on how much your home is worth when you want to buy the share.
If you decide to buy more shares, you must buy them within three months of the valuation date. After this, the home will need to be revalued.
Due to planning conditions in rural areas, most shared owners are restricted to 80% ownership. This restriction enables us to keep properties as affordable homes and ensure they always benefit local people. A few shared ownership homes can be staircased to 100%, which means you would become the freeholder.
Designated protected area (DPA) lease
There are some areas where 100% staircasing is allowed. This enables you to purchase 100% of the equity, but you wouldn't acquire the freehold.
- With this type of lease, if you wish to sell, and have purchased above 80%, the association must nominate a buyer within eight weeks of receiving notice that you want to sell.
- This is to ensure that homes remain available for for local people
- If you do buy 100%, you will still need to pay your service charge to cover communal costs (where applicable).
You'll be advised of the staircasing limit on your home when you buy it.
Depending on which type of lease you have, there are different rules around buying more shares.
- You can usually buy shares of 10% or more at any time.
- Some newer leases will allow you to buy shares of 5% or more.
- You cannot buy shares of 2%, 3% or 4%.
- If you bought your home on or after 1 April 2021, you may also be able to buy shares of 1% each year for the first 15 years.
Take a look at the Key Information guides for more details
Traditional shared ownership lease – generally homes bought before 2021
New model shared ownership lease – generally homes built between 2021 and 2026 with grant funding
If you’re unsure which lease type you have, please get in touch on 0300 1234 009 or at enquiries@midlandsrural.org.uk
You'll need to consider the following costs:
- Valuation fee
You’ll need to pay for a property valuation.
This is approximately £180 to £300 plus VAT – paid by you directly to the valuer. - Solicitor fees
You’ll need to appoint and pay a solicitor. Legal fees are normally paid by you on completion. - Mortgage arrangement fees
If you’re buying your extra share through a mortgage, you may incur mortgage arrangement fees. - Stamp duty
This may be payable - please check with your solicitor.
If you’ve made improvements to your home, any increase in its value because of these will not be taken into account for the purposes of staircasing.
This is to ensure that we don’t benefit from any value you may have added.
Be aware that the cost of improvements you've made may not match their current value. For example, if you spent £5,000 on home improvements, this does not mean that the valuer will deduct £5,000 from the value.
The independent valuer will decide on a reasonable figure for improvements.
This varies depending on the terms of your lease. You should seek legal advice.
How to buy more shares
The cost of the additional shares is based on the open market value of your home at the time you wish to buy them.
You’ll need to think about what funds you’ll need to buy the additional share and whether a mortgage or remortgage is required. We will have to approve any new mortgage.
Recommended independent financial advisors
If you’re considering staircasing, we recommend that you talk to an independent mortgage advisor to confirm your options.
Here are two independent financial advisors we work closely with, who have a good understanding of shared ownership mortgages. They’re not associated with, or part of Midlands Rural Housing or the Rural Housing Association. Please contact them directly to discuss their services and fees.
Jamie Hastie, Hawthorne Mortgages
T: 0115 9638965
M: 07941 041150
E: jamie@hawthornemortgages.co.uk
Mark Singleton, Mortgage Advice Bureau
T: 01327 703252
M: 07971 213099
E: mark.singleton@mab.org.uk
Please talk to us if you're thinking about staircasing, as we can offer advice.
In some circumstances, buying more shares may not be the best option for you.
If you decide to buy more shares in your home, we'll need to know how many further shares you wish to purchase and how you plan to pay for it.
Get in touch on 0300 1234 009 or at leaseholdsupport@midlandsrural.org.uk
You will need to appoint a solicitor or conveyancer to act on your behalf during the purchase.
We recommend that you use a solicitor experienced in helping shared owners to buy more shares.
Once you’ve let us know you’d like to purchase shares, we’ll ask you to obtain a valuation of your home, to establish the current market value.
This must be done by an independent surveyor qualified through the Royal Institution of Chartered Surveyors (RICS). Please note that you’ll be responsible for paying the valuation fee.
We recommend you use a surveyor with experience of shared ownership leases and their resale requirements. We can provide details of experienced surveyors if required. They’re not associated with, or part of, our organisation.
If you’ve made home improvements that affect the value of your home, the valuation must show two amounts:
- The current market value – the home’s value including any increase because of home improvements
- The unimproved value – its value ignoring any home improvements carried out.
Once we’ve received the valuation, we’ll inform you in writing what the cost of your new share and what your revised rent will be.
If you decide to go ahead, you must write to us confirming you accept the price of the shares.
You can do this by emailing leaseholdsupport@midlandsrural.org.uk
You’ll also need to confirm the details of your solicitors. We recommend that you use a solicitor experienced in help shared owners to buy more shares.
The sale must then be completed within three months of the valuation date. Once the purchase is completed, your rent will be reduced accordingly.