What is Staircasing?

Staircasing refers to the process by which an individual can buy additional shares in their shared ownership property, gradually increasing their ownership stake and correspondingly decreasing the portion for which they have to pay rent to a housing association.

Ultimately, the goal of staircasing is to eventually own 100% of your property. Once you achieve this, you no longer need to pay rent to the housing association.

A hypothetical staircasing example

Let’s say you purchase 25% of a property valued at £200,000 through a shared ownership scheme. This would mean your initial ownership stake would be worth £50,000. You would then pay rent on the remaining 75% of the property’s value.

After a couple of years, you decide to increase your share to 50%. You would undergo a valuation process to determine the current market value of the property.

Suppose the property is now worth £210,000. To increase your share to 50%, you could purchase an additional 25% at the new market value, which would cost £52,500.

Post-staircasing, your ownership would be 50%, and you’d only be paying rent on the remaining 50% of the property’s value.

You can continue this process, commonly in increments of 10% or more, until you own the property outright, at which point you would no longer pay any rent.

It’s important to note that each time you staircase, the cost of the additional share will be based on the current market value of the property, which may have increased or decreased since your initial purchase. You’ll also likely incur various costs such as mortgage valuation fees, legal fees, and potentially LBTT, depending on the size of the share being purchased.