Staircasing: Meaning & How Does it Work
If you are a first-time buyer struggling to get onto the property ladder, or if you are looking to downsize or increase your living space, shared ownership could be an option worth considering. Shared ownership schemes allow you to buy a percentage of a property and pay rent on the remaining share.
Staircasing is the process of buying additional shares in your shared ownership property to increase your ownership percentage. In this article, we’ll take a closer look at staircasing in conveyancing and what you need to know before deciding to proceed.
What is Conveyancing?
Conveyancing is the legal process of transferring ownership of a property from one party to another. It involves a range of tasks, including searches, contract preparation, and the transfer of funds.
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A conveyancer is a licensed professional who is qualified to undertake conveyancing work.
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How Does Staircasing Work in Conveyancing?
Staircasing in conveyancing is the process of buying additional shares in a shared ownership property. The process typically involves the following steps:
- Contact your housing association – If you are interested in buying additional shares in your shared ownership property, you will need to contact your housing association to find out how to proceed.
- Obtain a valuation – You will need to obtain a valuation of your property to determine the current market value. This will help you to calculate how much you will need to pay for the additional shares.
- Apply for funding – If you need to obtain funding to purchase the additional shares, you will need to apply for a mortgage or other type of finance.
- Instruct a conveyancer – You will need to instruct a conveyancer to handle the legal aspects of the transaction, including searches, contract preparation, and the transfer of funds.
- Complete the transaction – Once all of the necessary steps have been completed, you will be able to purchase the additional shares in your shared ownership property.
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What Are the Benefits of Staircasing?
Staircasing can offer several benefits, including:
- Increased ownership percentage – By purchasing additional shares, you can increase your ownership percentage in the property, reducing the amount of rent you pay.
- Greater financial security – As you own a larger share of the property, you may be able to secure a better mortgage deal, reducing your monthly payments.
- Increased control – With a larger ownership percentage, you may have more say in how the property is managed.
Also See: How Long Does Conveyancing Take After A Mortgage Offer In The UK?
What Are the Risks of Staircasing?
Before deciding to staircase, it’s important to understand the potential risks, including:
- Additional costs – Buying additional shares in a shared ownership property can be expensive, with fees adding up.
- Valuation issues – If the valuation of the property has increased since you bought your initial share, you may end up paying more than you expected for the additional shares.
- Maintenance costs – As a shared owner, you will be responsible for a share of the property’s maintenance costs, which can be expensive.
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How Much Does Staircasing Cost?
The cost of staircasing will depend on several factors, including the current market value of the property, the percentage of shares you wish to purchase, and any fees or charges associated with the transaction. It’s important to obtain a valuation and seek professional advice before making a decision.
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How Much Can I Staircase?
There are usually no restrictions on how much you can staircase, although there may be a minimum percentage that you must own before you can proceed. It’s important to check the terms of your lease to understand your options.
How Often Can I Staircase
There are usually no restrictions on how often you can staircase, but there may be a minimum period that you must wait before you can buy additional shares. This can vary depending on the terms of your lease, so it’s important to check with your housing association.
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Can I Sell My Shared Ownership Property After Staircasing?
Yes, you can sell your shared ownership property after staircasing. However, it’s important to note that if you sell your property, your housing association will have the first right of refusal to buy back your shares. This means that they will have the option to purchase your shares before you can offer them to anyone else.
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How Do I Know if Staircasing is Right For Me?
Deciding whether to staircase can be a complex decision, and it’s important to seek professional advice before making a decision. Your conveyancer can help you to understand the costs involved and advise you on whether staircasing is the right option for you.
How Can I Find a Conveyancer to Help With Staircasing?
If you are considering staircasing, it’s important to find a conveyancer who is experienced in handling shared ownership transactions. You can search for a conveyancer online or ask for recommendations from friends or family members who have gone through the process.
Also See: Conveyancing Help For First Time Buyers
How Long Does the Staircasing Process Take?
The length of the staircasing process can vary depending on a number of factors, including the complexity of the transaction and the speed of your housing association. However, the process typically takes between 8-12 weeks.
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What Documents Will I Need for Staircasing?
To staircase, you will need to provide a range of documents, including proof of identity, proof of income, and details of any outstanding debts or credit commitments. Your conveyancer will be able to advise you on the specific documents you will need to provide.
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Can I Staircase if I Have Bad Credit?
If you have bad credit, you may find it more difficult to obtain funding for staircasing. However, there are specialist lenders who may be able to help, and your conveyancer can advise you on your options.
Can I Staircase if I Have a Help to Buy equity loan?
If you have a Help to Buy equity loan, you may still be able to staircase, but you will need to pay off the loan in full before you can proceed. Your conveyancer can advise you on the specific steps you will need to take.
Also See: Transfer of Equity: Home Conveyancing Guide
Conclusion
Staircasing in conveyancing can be a great way to increase your ownership percentage in a shared ownership property, offering greater financial security and control. However, it’s important to understand the costs involved and seek professional advice before making a decision. By working with an experienced conveyancer and carefully considering your options, you can make an informed decision and take the next steps towards owning your own home.
