What is staircasing?
You’ve already taken the first step towards buying your own home with Sovereign shared ownership. When you’re ready to take another, we’re here to help.
If you’d like to own more of your home – or even buy it outright – we can guide you through the process of buying more shares in your property, and help you decide if it’s right for you.
Owning a bigger proportion of your shared ownership home – or even owning all of it – comes with many benefits:
- You’ll reduce the amount of rent you pay to Sovereign
- If you decide to sell your home the more shares you own will lead to more profit if the value of your home has increased
- If you own 100% of your home, in most cases you can sell it on the open market using an estate agent of your choice, and you’ll benefit from any profit made
- Becoming the outright owner means you can maximise the profit from any major home improvements you carry out if you choose to sell
How does it work?
The process of buying extra shares, and increasing how much you own of your home, is called ‘staircasing’. There are two options available when staircasing:
01. Interim – Buy a little bit more at a time
You can buy additional shares in your home in stages, typically in 10% increments. The amount you pay us in rent will go down as the amount of the property you own goes up.
02 . Final – Buy all the remaining shares in your home
You can buy the remaining shares in your home to reach 100% ownership, either in one payment or after several interim transactions. When you have bought all the shares in your home, you’ll own your home outright and will no longer be a shared owner, and will no longer need to pay rent to Sovereign (service charges and ground rent may still apply). You’ll now be classified as a leaseholder or a freeholder, depending on your lease.
What are the steps to staircasing?
There are five main steps to staircasing which we've outlined below:
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.
If you’re happy with the estimated costs and would like to proceed with buying additional shares you will need to complete our online application form here. Once you've completed the form we'll need to do a couple of background checks, as soon as these are done we will be in touch to let you know whether it's possible to purchase the additional shares.
Once we have confirmed in writing that you can buy the requested number of shares, you will need to arrange an open market valuation of the property. This must be done by an independent surveyor qualified through the Royal Institute of Chartered Surveyors (RICS) or Fellow of Royal Institute of Chartered Surveyor (FRICS). There are a few other requirements of the valuation report and we have put together a detailed valuation guidance document for your surveyor.
As soon as we receive the property valuation report we have a few checks to make in line with the valuation requirements. We will then also calculate the purchase price of the shares you wish to buy based on the valuation report and confirm this and all other details in writing to you along with an Authority to Proceed Form. This form confirms to us that you accept the price of the shares and wish us to commence the transaction - all leaseholders named on the lease must sign this form.
At this point, you will also need to confirm the name and address of the solicitors that will be acting on your behalf. Once we receive your completed Authority to Proceed form we instruct our solicitors and pass on all relevant information to your solicitors. They then work together to agree a completion date with you. During this time, you will need to contact your solicitor for any progress updates.
If you have purchased additional shares but haven't staircased to 100% we will contact you after completion to reconfirm the revised rent and/or service charges that you will need to pay. If you have purchased 100% of your property then you will no longer have to pay Sovereign any rent but you may still need to pay ground rent and service charges, we will confirm this in writing following the completion.
Still have questions?
We've put together an overview below of our Frequently Asked Questions. If you'd like to discuss your application or would still like further details, you can contact the team on firstname.lastname@example.org or 0300 330 0718
What are the benefits in staircasing?
Buying more shares in your home has a number of benefits:
- Buying more shares in your home means you reduce the amount of rent you pay to Sovereign
- When you decide to sell your home, the greater percentage you own, the more profit you will make if the value of your home has increased
- If you own 100% of your property, in most cases you can sell your property on the open market using an estate agent of your choice
- If you buy the remaining shares in your home and own 100% of your property, in most cases you can sell your home to anyone interested in buying it and are not restricted to those applying for affordable homes -this will need to be confirmed by us
How long could it take?
As a guide, we suggest that the transaction to buy more shares in your home should complete within 3 months.
You and your solicitor should work towards this timeframe, and by providing all the relevant information required you can help the process run smoothly.
What does it cost?
We are committed to creating affordable homes for our customers – and so it’s important that you carefully consider all the costs involved in buying more shares in your home before you decide to apply.
Each time you purchase additional shares, you’ll have expenses to pay such as legal fees, mortgage fees, and our administration charge for handling your application. We recommend that you seek advice from your mortgage lender or an independent financial adviser. More information on staircasing fees can be found here.
Are there any restrictions to staircasing?
We are dedicated to making this process as easy as possible for you – and in most cases, there are no restrictions on buying more shares in your home. However, a small number of leases have staircasing restrictions in place which means you’ll only be able to staircase up to 80% in your home. We’ll check this for you when you submit your application, or you can check your lease before you apply.
How does the application work and what are the other considerations?
There are five steps to applying to buy more shares.
1. Check your finances using our handy staircasing calculator
2. Complete our online application form
3. Arrange a valuation
4. Complete the Authority to Proceed form and provide details of your solicitor
There are a few things to note...
When you apply to buy more shares in your home you will be asked to provide details of any improvements you have carried out with Sovereigns’ written consent. You will be required to provide your written evidence that consent has been obtained. Retrospective consent may be considered if you are able to provide all relevant documents, e.g.: plans, receipts certificates. Sovereign charge a fee for granting retrospective permission.
We will then begin to process the information you have provided. We will check your rent and service charge account and your lease, and confirm to you within 15 working days whether you are eligible proceed.
At this point we will require the payment of our administration fee £180 (inclusive of VAT). Once your completed application has been submitted, you will receive an acknowledgement of receipt if you have provided all the information required.
If your application is incomplete we will let you know what is required. We advise that you do not start your part of the process until we have notified you that we have completed our checks as we do not want you to incur unnecessary fees.
Will I need a solicitor?
Yes, it’s important that all property transactions are handled professionally by a solicitor. If you need help finding a solicitor to act on your behalf, please let us know. Once you’ve instructed a solicitor to work with you, you’ll need to give us their details.
We’ll also instruct solicitors to act on our behalf, who will pass on all relevant information to your solicitors as soon as we receive your completed Authority to Proceed form.
Your solicitor and ours will then work together to agree a completion date – usually within three months of your application. You should keep in close contact with your solicitor for regular updates – it’s best that you work with them, rather than contacting us directly.
What is a RICS valuation?
The Royal Institute of Chartered Surveyors (RICS) is the UK’s leading professional body for qualifications and standards in land and property.
To buy more shares in your home you will need to instruct and pay for a RICS Valuation which is used to determine whether the value of your share has changed since you bought the property, and therefore defines the price your additional shares need to bought at.
How do I get a RICS valuation?
You can search for a local RICS qualified surveyor on the RICS website www.ricsfirms.com.
How long will a RICS valuation last?
The valuation must not be more than three months old. Should the transaction not complete within three months you’ll need to update your valuation. We suggest asking your surveyor whether they’ll issue updates to the valuation report every three months for little or no cost.