Buying more shares (staircasing)

Buying more shares and owning more of your shared ownership home can come with several benefits.

• You’ll reduce the amount of rent you pay.
• If you decide to sell your home, the more shares you own, the more profit you can potentially make.

Please talk to us if you're thinking of staircasing, in some circumstances it's not the best option. You can get in touch by email or on 0300 1234 009.

We'd also recommend that you get independent legal advice before proceeding with staircasing - see section below.

Each share you purchase will be at the current market value.

Due to planning conditions in rural areas, most of our shared owners are restricted to 80% ownership. This restriction enables us to keep our properties as affordable homes and ensure they benefit local people.

A few of our shared owner homes can be staircased to 100% (see below). If you do buy 100% you will still need to pay your service charge to cover communal costs.

You'll be advised of the staircasing limit on a property when you’re first given the details.

Buy back lease

There are some areas where 100% staircasing is allowed. This will be on a 'buy back lease'. 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 80% or more, you're obliged to sell back the property back to us.

This to ensure that our homes remain in perpetuity (always available for) for local people.

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 a solicitor and there will be legal costs associated to this. These are normally paid by you on completion.

Mortgage arrangement fees

If you’re buying your greater share through a mortgage, you may incur mortgage arrangement fees.

Stamp duty

Stamp duty may be payable, please check with your solicitor if this would apply.

If you’ve made any improvements to the property, any increase in its value due to the improvements 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 to the property.

However, please be aware that the cost of the improvements you've made may not equate to value. For example, if you have spent £5,000 on home improvements, this does not mean that the valuer will deduct £5,000 from the value of your property. The independent valuer will decide on a figure deemed reasonable.

This varies depending on the terms of your lease and you should seek legal advice.

If you wish to look into staircasing, we recommend that you talk to an Independent Mortgage Advisor to confirm your options.

Please see below a couple of independent financial advisors we work closely with who have a good understanding of shared ownership mortgages. They are 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 of Hawthorne Mortgages

T: 0115 9638965
M: 07941 041150
E: jamie@hawthornemortgages.co.uk

Mark Singleton of Mortgage Advice Bureau

T: 01327 703252
M: 07971 213099
E: mark.singleton@mab.org.uk

The cost of the additional shares is based on the open market value of your home at the time that you wish to buy them.

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, please get in touch by email or on 0300 1234 009

We'll need to know how many further shares you wish to purchase and how you plan to pay for it.

You will need to appoint a solicitor or conveyancer to act on your behalf during the purchase process.

Once you’ve let us know you’d like to purchase shares, we’ll ask you to obtain a valuation of your property, 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 are not associated with, or part of, our organisation).

Once we’ve received the valuation, we’ll inform you in writing what you will need to pay for your further share.

If you decide to proceed you must write to us confirming your acceptance of the price of the shares.

You’ll also need to confirm the details of your solicitors. We recommend that you use a solicitor experienced in assisting shared owners to buy more shares.

The transaction must then be completed within three months of the valuation date. Once the purchase is completed, your rent will be reduced accordingly.