What is staircasing?
When you own a shared ownership home, you may have the option to increase the percentage of shares you own. This process is known as staircasing. You can do this at any time that suits you. The price you pay for the additional shares will be based on your home’s current market value.
While you are not obligated to staircase, it is an excellent way to work towards owning your home outright. In some rare instances, staircasing up to 100% may not be possible. Our sales consultants will inform you if this applies to your property.
If you purchase additional shares but do not reach full ownership, your rent payments to Hyde will decrease proportionally. However, other charges, such as service fees, will remain the same.
If you choose to buy all the remaining shares, you will become the outright owner. For houses, this means you will become the freeholder. For apartments, you will remain a leaseholder and continue to pay the applicable service charges.
How is the staircasing price determined?
The cost of additional shares you buy is based on the current market value of your property at the time of staircasing, meaning the price can fluctuate over time.
To proceed, you’ll need to obtain an open market valuation from a qualified RICS (Royal Institution of Chartered Surveyors) surveyor. We provide a list of approved surveyors who offer preferential rates and have experience valuing properties in your area. Please note that we will only accept valuations from surveyors on our approved panel, and you are responsible for arranging and covering the cost of the valuation.
In accordance with the terms of your shared ownership lease, the surveyor’s valuation is final and binding for both you and us. Any additional shares you wish to buy must be purchased at the price set by the RICS surveyor. Once we receive the valuation report, we will calculate the cost of your additional shares and provide you with detailed next steps.
What are the benefits of staircasing?
There are several advantages to increasing your ownership share through staircasing:
• Reduced rent payments: As you purchase more shares, your mortgage payments will increase, but your rental payments to Hyde will decrease proportionally.
• Potential for full ownership: In most cases, you can staircase up to 100% ownership. At this point, you will no longer pay rent—only your mortgage, along with any service charges and ground rent, where applicable.
• Equity growth: The more of your home you own, the more you will benefit from any increase in its market value. If property prices rise, the value of your investment will increase accordingly.
• Freedom to sell: You may sell the shares you own in your home at any time and move on. Your lease stipulates that Hyde will have the first option to find a buyer for your home for a short period before you can list it with an agent. If you staircase fully and own 100% of your home, you will no longer be required to give Hyde the first opportunity to market your property.
• Expanded mortgage options: Full ownership may grant you access to a wider range of mortgage products, as you’ll be eligible for standard mortgages rather than those specific to shared ownership.
What is the process of staircasing?
If you’re considering staircasing, understanding the steps involved can help make the process smoother. The process is outlined below.
1. Form of Instruction
After we’ve approved the valuation and confirmed the cost of the additional share, we’ll send you a Form of Instruction. This document outlines:
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- Current and additional shares: Details of the share you currently own and the additional share you wish to purchase.
- Solicitor information: Contact details of your chosen solicitor.
All legal owners of the property must sign the Form of Instruction. At this stage, you’ll need to pay an administration fee. Any outstanding rent or service charge arrears must be settled before completion.
2. Formal Offer
Once we receive your signed Form of Instruction, we’ll issue a formal offer letter confirming the additional share you’re purchasing and the price of the additional share.
If you’re partial staircasing (buying an additional share but not reaching 100% ownership), we’ll also inform you of your new, reduced rent amount, effective after completion.
3. The Legal Process
With the formal offer letter in hand, it’s time to engage in the legal formalities:
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- Instruct your solicitor: Ask your solicitor to act on your behalf for the staircasing transaction. We’ll instruct our solicitors, and both legal parties will coordinate to finalize the deal.
- Mortgage offer: Your solicitor will help you obtain a formal mortgage offer from your lender, if necessary.
- Memorandum of staircasing: Our solicitors will draft this crucial legal document, which details the share purchased, the price paid, and the completion date.
- Lease update: Your solicitor is responsible for inserting the Memorandum of Staircasing into your lease and updating the Land Registry.
We can provide a list of independent solicitors experienced in shared ownership who offer competitive rates. Choosing a solicitor familiar with shared ownership can help prevent delays.
4. Completion
The final step involves coordination between solicitors to finalize the transaction. Our solicitors will confirm with your solicitor that all legal requirements are met and will set a completion date.
