What Is Staircasing and How Does It Work?

Shared ownership can be seen as an affordable means onto the property market. In 2022-23, 17,507 initial shared ownership sales were completed in England.

You may have heard the term staircasing. But what exactly does it mean, and how does the process work?

Staircasing is one of the key benefits of shared ownership, giving homeowners the opportunity to gradually increase the share they own in their property over time.

Whether you’re looking to reduce your rent payments, invest more in your home, or work towards full ownership, staircasing could help you achieve your homeownership goals.

In this guide, we’ll explain staircasing in simple terms and walk you through the process step by step.

What Is Staircasing?

Staircasing is a great way to increase your ownership in your shared ownership home by purchasing additional shares over time. Depending on the terms of your lease, you may be able to buy shares in stages, at a pace that works for you. In 2022, more shared owners chose to staircase in larger amounts, with the average share purchased increasing to 34%.

When you first purchase a shared ownership property, you buy a percentage of the home and pay rent on the remaining share owned by the housing provider.

As your circumstances change, you may choose to buy a larger share of the property. Every time you increase your ownership percentage, this is known as staircasing.

For example:

• You buy an initial 40% share of your home.
• Later, you purchase an additional 20%.
• You now own 60% of the property and pay rent on the remaining 40%.

Many homeowners staircase multiple times throughout their ownership journey.

Why Do People Choose to Staircase?

Everyone’s reasons are different, but staircasing can offer a number of benefits.

As your ownership share increases:

• You own more of your home.
• The rent you pay on the remaining share usually decreases.
• You may be able to build more equity in your property.
• You can work towards full ownership, where your lease allows.

For many shared owners, staircasing provides flexibility, allowing them to increase ownership at a pace that suits their circumstances.

How Does Staircasing Work?

While every transaction is unique, the process generally follows five simple stages.

Step 1: Decide How Much You’d Like to Buy

The first step is deciding how much additional share you’d like to purchase.

Some homeowners choose to buy a small additional share, while others opt for a larger increase or aim for full ownership where possible. Your decision will often depend on factors such as your finances, savings, mortgage options and future plans. Your lease may also stipulate your percentage increments.

Step 2: Get a RICS Valuation

Before you can purchase additional shares, your property will need to be valued.

The valuation determines the current market value of your home and is used to calculate the price of the additional share you’re buying.

It’s important to remember that staircasing is based on your home’s current value, not the price you originally paid.

Step 3: Arrange Legal and Financial Requirements

If you’re purchasing a larger share, you’ll usually need a solicitor to carry out the legal work.

If you’re using a mortgage to fund the purchase, you’ll also need to make arrangements with your lender.

Your solicitor and mortgage provider will work together to ensure everything is in place before completion.

Step 4: Complete Your Staircasing Application

Once you have your valuation, you’ll submit the necessary information to begin the process.

This allows the team to confirm the details of your staircasing transaction and guide you through the next steps.

Step 5: Complete the Purchase

Once all legal and financial arrangements have been completed, your staircasing transaction can be finalised.

Your ownership share increases, and your rent is adjusted to reflect the smaller share still owned by the housing provider.

You’ll then receive confirmation of your updated ownership percentage.

Can Everyone Staircase?

Most shared ownership homeowners can staircase, although the options available will depend on the terms of their lease.

Some newer shared ownership leases may also allow homeowners to purchase additional shares in smaller 1% increments for the first 15 years, making staircasing more accessible and affordable.

If you’re unsure what options are available to you, checking your lease or contacting the Homeownership Team is a good place to start.

Is Staircasing Right for You?

Some homeowners choose to increase their share after receiving a pay rise, building up savings or reviewing their long-term financial goals. Others simply want to reduce the rent they pay or move closer to full ownership.

The most important thing is understanding your options and ensuring staircasing is the right decision for your circumstances.

Ready to Learn More?

If you’re considering staircasing, we’re here to help.

Visit our Staircasing Guide for detailed information about eligibility, costs, valuations and the steps involved in buying additional shares in your home.

Taking the next step towards greater ownership could be closer than you think.