For many Shared Ownership customers, owning their home outright is a dream that might not feel achievable. That’s where staircasing comes in. Think of it like climbing a staircase, allowing you to gradually increase the percentage of the property that you own.
But how do you know when is the best time to do this? Let’s look at how staircasing works and how you can benefit from increasing your share of ownership in your home.
How does staircasing work?
Most Shared Ownership agreements allow you to staircase in increments—typically by at least 10% at a time—until you own 100% of your home. The more shares you own, the less rent you’ll pay on the remaining share.
For those on the new model of Shared Ownership, there is also the option of gradual staircasing. This is where you can increase your equity stake in your home annually by 1% of its full market value at the time. This can happen at any time, but it is limited to one transaction per year.
When is a good time to start?
A great time to think about buying more of your property is when your mortgage is up for renewal. The reason being is the paperwork, legal fees, and other logistics are already being sorted for your remortgage, so adding the staircasing process into the mix can save you time, hassle, and potentially some costs too. You won't need to pay legal fees twice, as your remortgage and staircasing can happen simultaneously.
Many Shared Ownership customers aren’t aware that this is a great moment to buy a bigger share of their home. But it's worth considering, especially if your financial situation has improved since you first bought the property.
Changes in your circumstances
Of course, staircasing can happen at any time if your circumstances change. If you’ve received a pay rise, inherited a lump sum, or simply saved up, you might want to put the funds into your property. Maybe you’ve started a new job with higher pay, or your partner has moved in with you, making it easier to afford more of the property. Staircasing is flexible to your needs—you can increase your share at your own pace.
Jenny and Marks staircasing journey
In 2020, Jenny and Mark* purchased a 40% share of a three-bedroom home in Gloucester through SNG’s Shared Ownership scheme. Their rent at the time was £357.50 per month. When their mortgage was up for renewal, they decided the time was right to begin staircasing due to an increased salary since the first share was bought. By purchasing an additional 45% share for £121,140, their ownership rose to 85%, significantly reducing their rent to just £95.71 per month.
Staircasing not only gave Jenny and Mark more equity in their home, but it also slashed their monthly outgoings. They chose to do this at the same time as remortgaging, resulting in financial benefits without doubling up on costs.
Why should you consider staircasing?
Reduced rent
As your ownership increases, your rent decreases. The more of your home you own, the less you will pay in rent to SNG.
More equity
Owning a larger portion of your home means you’re building more equity, which could come in handy if you decide to sell the property or remortgage in the future.
Financial flexibility
You can staircase by a small or large amount, it’s a way to adapt your housing situation to your current financial standing. It’s all about finding what works for you.
Our top tips to staircase
Plan around your mortgage renewal: If your mortgage is up for renewal soon, this is the perfect time to consider staircasing. You could save on legal fees by combining both processes.
Talk to an Independent Financial Advisor (IFA): An IFA can help you understand what you can afford and whether staircasing makes financial sense for you right now.
Review your circumstances: Consider whether a recent pay rise, savings, or changes in your household income make staircasing more achievable.
Remember the legal costs: Don’t forget that staircasing involves legal fees, but the good news is that if you’re already remortgaging, you’ll only need to pay once!
Use our online staircasing calculator to work out how much the cost of buying more shares could be. 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. You can do the calculations here.
How can I find out more?
If you're interested in finding out more, we’d love to chat with you about your options. Get in touch with our team, and we’ll guide you through the next steps in your staircasing journey.
Email us at: staircasing@sovereign.org.uk
Call us on: 0300 330 0718
*Names have been changed