Your guide to staircasing
What is staircasing?
Staircasing is the term given to buying extra shares in your shared ownership property.
Can any shared owner staircase?
In the majority of cases there are no restrictions on who can staircase, although we would recommend that, in the first instance, you refer to the terms of your lease. This may require assistance from your legal representative.
What are the benefits of Staircasing?
- Buying a greater proportion of your home has a number of benefits:
- The amount of rent you pay will reduce
- When you sell your home, the greater the proportion you own, the greater the profit you will make if your home has increased in value
- If you own your property outright, you can sell your property on the open market using an estate agent of your choice
How many shares can I buy?
The number of shares you can buy is defined in your lease agreement. The minimum additional share purchase is 10%, the maximum is 25%.
What will I pay for the extra shares?
The shares will be sold to you at current market value, disregarding any improvements to your home that we have consented to. An assessment of current market value will be made by a Royal Institute of Chartered Surveyors (RICS) qualified Valuer by way of an open market valuation of your property.
What are the costs involved in Staircasing?
There will be certain expenses to pay every time you staircase, therefore you must consider these when making a decision to staircase.
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The main expenses you will have to pay are:
- Valuation fee. In accordance with your lease, the property must be independently valued to determine a current market value. Cheltenham Borough Council can arrange for an independent RICS valuer to undertake the valuation on your behalf, or you can elect to appoint your own valuer, providing they are RICS qualified. Fees range from £150 - £350. Note that the valuation is valid for three months. If your staircasing does not complete within this period, you will be required to pay an additional fee.
- Legal fees. Staircasing will require a change to your existing lease, which will require the professional services of a solicitor.
- Stamp duty. In certain cirumstances, you may need to pay Stamp Duty. Your legal representative will discuss this with you.
- Mortgage fees. If you remortgage with a new lender, you will be required to pay the lenders valuation fee and you may be required to pay a mortgage arrangement fee. If you re-mortgage with your existing lender, there may be penalty charges. You should speak
to your mortgage lender about charges before applying to staircase. - Rent and service charge arrears. Any arrears must be cleared before the staricasing transaction can complete.
What happens when I become the outright owner (own 100%)?
Once you own 100% of your property, you will no longer pay rent to Cheltenham Borough Council.
If you own a house, the freehold of your home will be transferred to you on your request. Once this has taken place, you will no longer be charged for buildings insurance. In some cases, you may still pay a service charge if you live on an estate with communal costs.
If you own a flat and staircase to 100%, you will own a long-lease on the property and Cheltenham Borough Council will continue to own the freehold and be responsible for services and maintenance to the common parts of the block.
In both instances, you are free to sell the property on the open market under the provisions set out in the relevant land registry document.
If you'd like to start the staircasing process please contact our leaseholder team on 0800 408 0000 or email leaseholders@cheltenham.gov.uk