It’s a relatively simple process, taking you from a modest share purchase through to 100% ownership. Here’s how it works.
Three steps to increasing ownership
In many cases, you can staircase up to three times after your initial purchase, depending on your lease.
- Let’s say you initially buy a 25% share of your home. After a certain amount of time (which will be stipulated in your lease agreement), you could then buy an additional 25%. Now you own 50% of your home.
- After the next allotted time has passed, you can then buy another 25% – now you’ve got a 75% share.
- The third and final staircase would buy another 25%. Your home is now 100% yours.
You don’t have to staircase to 100% ownership. You can choose how much you purchase each time (although there is usually a minimum 10% purchase limit).
However much you invest, you not only increase your equity in the house but also you reduce the rent you pay on the remaining share.
What do I have to do?
Every time you staircase, you will need to pay to have your home properly valued by a RICS-qualified surveyor. The current value of your home determines the cost of the additional share.
Be aware that the value of your home may increase or decrease depending on a range of factors, including things out of your control like market trends.
You will also need to be ready for additional administration fees and legal costs as well as any potential fees to your mortgage lender and any additional Stamp Duty costs.
Benefits of staircasing
Staircasing is optional, but there are several reasons to consider it.
- The more you own, the less rent you pay. although your mortgage may be higher.
- You could own 100% of your home and have no rent to pay at all.
- The more of your home you own, the more you benefit from increased property prices that raise the value of your home.
- If you own 100% of your home, you don’t need to give Raven Homes the opportunity to market it before selling.
- Owning 100% of your home will give you a better choice of mortgage options because you won’t just have access to Shared Ownership mortgages.
Downward staircasing
Downward staircasing may be an option if your circumstances change and you need to reduce your ownership share.
Unlike upward staircasing, which is available to anyone, downward staircasing is only an option for people who find themselves in exceptional circumstances, such as financial hardship or a significant change in personal circumstances that affects your ability to pay your mortgage.
If you do qualify, downward staircasing lowers your ownership share which decreases your mortgage payments. However, it will mean your rent payments increase again. In some cases, it may mean selling your full share back to Raven Homes and becoming a tenant instead. However, this option isn’t guaranteed.
If you find yourself in a difficult situation, please contact Raven Homes.