Staircasing is the term given to buying extra shares in your shared ownership property. All leases include provisions for portioned percentage staircasing.

Some leases also include provision for additional percentage value (1%) staircasing within a prescribed time period. Please check your lease for details applying to your specific lease agreement.

Where your lease includes both types of provision, these are separate processes and both types of provision should be considered when making any decision about staircasing.

How does additional percentage value (1%) staircasing work?

Additional percentage value staircasing where included in your lease agreement makes provision for purchasing 1% of your property each year for a specific number of years to increase the share of the property you own in a more affordable way.

As a small percentage is being purchased, shared owners are more likely to be able to purchase more of their home through savings. The process follows a prescribed formula to calculate the price to pay for the additional percentage, so a new valuation report is not needed, reducing the cost incurred by instructing a valuer, and potentially reducing legal fees.

Once the value of the additional percentage is calculated, it will remain valid for completion of the purchase of the 1% for 3 months.

If your lease includes this provision, and you would like to request an additional percentage value notice and expect to be able to complete the purchase within 3 months, please select this option on our online shared ownership form below.

How does portioned percentage staircasing work?

Most leases allow you to buy extra shares after you have owned your initial shares for three months. You may choose to go up another step on the homeownership ladder by buying some of the remaining shares in your home; this is known as partial staircasing. If you choose to purchase all of the remaining shares in your home, it is known as final staircasing.

If you are thinking of partial staircasing, you will need to check your lease to confirm staircasing multiples and percentage allowed.

If you are considering staircasing, you will need to find out from your lender whether they are willing to lend you a further amount. The amount you can borrow will help you determine the size of the further share you are able to purchase. If you are considering changing mortgage providers, you need to consider if your current mortgage has any redemption penalties.

Please note that not all leases allow you to purchase all the shares in your home. Please check your lease to clarify.

How much will I pay for extra shares?

The shares will be sold at the current market value, disregarding any improvements to your home that we have consented to. The assessment of the current market value will be made by a Royal Institute of Chartered Surveyors (RICS) qualified valuer, by way of an open market valuation of the property.

Which valuer can I use?

You are responsible for obtaining your own valuation; the report should be submitted to Warwick District Council, at hsgfin@warwickdc.gov.uk

Before instructing your chosen valuer, you must ensure they are RICS qualified and current members; failure to do so may mean that Warwick District Council is unable to agree to your chosen valuer. You can locate a valuer and check they are qualified through the RICS website.

We recommend you obtain several quotes and query if the valuer will charge you for extensions should they be required.

The valuer will complete the valuation on the following terms in line with their RICS guidance:

The open market valuation will value the property as 100% leasehold or freehold with vacant possession and will assume the shared ownership lease had not been granted. Improvements and/or failure to keep the property in good repair will be disregarded.

Please note that an estate agent’s valuation is not acceptable; under the terms of the lease, the valuation must be carried out by a RICS qualified surveyor. Whichever valuer you choose, you are responsible for their fee.

How long is the valuation valid for?

The valuation is valid for three months. If completion has not occurred within three months, then either a revaluation or an extension will be required. Your valuer may charge for this.

What happens if I am not happy with the valuation figure?

If you dispute the value provided by your RICS valuer, you can challenge this by providing a written reason for your concerns directly with your chosen valuer. You should provide evidence of the sale prices of at least three similar properties in your area. You may then request that your valuer reconsiders their opinion.

If you are still not satisfied with the outcome, you may instruct another RICS qualified valuer to revalue the property at your expense. Warwick District Council will not be involved in this process and should only be forwarded the report once you are happy to proceed.

Why are improvements disregarded?

If you have made improvements to your home (such as fitted double glazing, for example) and we have consented to these improvements, you may ask the valuer to disregard the value the improvements have added to the open market value of your home.

The improvements are disregarded because they do not form part of our share. For example, if your home is valued at £150,000 with the double glazing but would have been valued at £148,000 if the double glazing had not been fitted, then the value of £148,000 will be the figure used to work out the value of the extra shares. We will check our files to make sure that the improvements have received our consent. The difference in valuation figures will not usually be the same as the figure paid for works to the property.

What do I do once I have the valuation?

You must submit the full valuation report, including notes, to us with the intention to staircase form. We will provide you with written confirmation of how much the additional shares will cost. Once we have confirmed to you the price, you need to let us know if you wish to proceed. You will also need to instruct a solicitor and confirm their details to us. We will also require details of your mortgage lender if partially staircasing.

What happens to my specified rent and other charges?

If you have partially staircased, the amount of specified rent you pay will reduce in accordance with the additional shares you have purchased. Buildings insurance charged on a percentage basis will increase in accordance with the additional shares purchased. Your ground rent and service charge, if applicable, will remain unchanged.

If you have purchased all of the remaining shares in your property, you will no longer have to pay specified rent. However, you will continue to be responsible for service charges and ground rent, if applicable. If your property is transferring to freehold, you will be responsible for arranging your own building’s insurance.

Will my property become freehold when I fully staircase?

This depends on the type of property you have and what is contained in the lease. If you live in a flat, the property will remain leasehold. If you live in a house, it is likely that the freehold interest will transfer to you on completion, unless we do not own the freehold or your lease does not allow us to transfer the freehold.

Please note that some leases state that the freehold will not transfer until three months after completion. Your solicitor will be able to advise you on this.

How do I start the staircasing process?

To start the staircasing process, please complete the online form (below) and include the RICS valuation.

On receipt of the intention to staircase form and valuation report, we will confirm to you the amount you will have to pay if you wish to buy extra shares. Our formal offer letter can be provided to your mortgage lender for confirmation of our consent to the staircasing.

Is there anything else I will have to pay?

You will be responsible for administration fees, the valuation fee, your solicitor’s fee and (if applicable) your mortgage arrangement and redemption fees.

Application

Shared ownership resale, staircasing or remortgaging application