How does staircasing work in Shared Ownership?

Buying a home through Shared Ownership is a brilliant way to take your first step onto the property ladder. You start by buying a share of the house, usually between 25% and 75%, and pay reduced rent on the rest.  

Over time, as your finances improve, you can choose to buy more of your home. This process, called ‘staircasing’, allows you to eventually own your house outright. 

In this blog post, we’ll look at how staircasing works, its benefits, and what to think about. 

What is staircasing? 

Staircasing helps you build long-term security and a greater sense of ownership by buying home shares. You might start by owning 30%, then decide to buy another 10% later.  

Many eventually reach 100%, meaning they own their home outright. You stop paying rent at that point - just your mortgage and any service charges or ground rent. 

Why do people staircase? 

Staircasing gives you many advantages: 

• You can usually buy up to 100% of your home.  

• Your rent goes down every time you increase your share.  

• You benefit more when your home increases in value.  

• You stay in control. There’s no pressure to staircase if you don’t want to. 

Staircasing is flexible, so you can stick with your current share or increase it when it feels right. 

Ways to staircase 

You can staircase in two different ways: 

• Gradual staircasing: You can buy a 1% share each year for the first 15 years after you become a shared owner. This option helps you grow your ownership steadily.  

The price of each 1% share is based on your home’s original value, adjusted annually according to the House Price Index (HPI). Your landlord will give you this HPI-based valuation each year or when you request to buy. 

• Standard staircasing: Any time, you can buy larger shares, typically 5% or more. You need a surveyor to value your home; your new share will reflect its current market value.  

Most housing providers recommend staircasing in blocks of 5% to 10% to make the process cost-effective. 

How does staircasing work? 

Once you’ve decided to staircase, you’ll need to arrange a home valuation - you’ll pay for your new share based on that value. If your home has increased in price, your new shares will cost more, but you’ll also gain more equity in a higher-value property. 

A staircasing example 

Let’s say you originally bought 30% of a £200,000 home, so your share was worth £60,000. A few years later, the home is valued at £220,000.  

You decide to buy another 20%, which costs £44,000. You now own 50%, and your rent drops because you only pay it on the half you don’t own. You can keep staircasing from there or stop whenever it suits. 

What does staircasing cost? 

Before you go ahead, make sure you plan for extra costs: 

• Mortgage fees: You may need to extend your mortgage or remortgage, which can come with arrangement fees or broker costs.  

• Valuation: A surveyor must assess your home’s current market value.  

• Stamp Duty Land Tax (SDLT): You may need to pay SDLT, particularly if your ownership passes 80%.  

• Conveyancing: You’ll need a solicitor to handle the legal paperwork.  

The total cost will vary depending on your home’s value, the share you’re buying, and your mortgage provider’s terms.  

Your housing provider or mortgage adviser can give you a clearer picture of what to expect. 

Need help with staircasing? 

Staircasing is a fantastic way to grow your ownership at a pace that suits your life and budget.  

The Open Door team is on hand if you’re ready to explore your options. Get in touch today to speak to one of our friendly advisors.