How does staircasing work with a Shared Ownership property?

Full answer

Staircasing is the mechanism that makes Shared Ownership a genuine path towards full ownership, rather than a permanently part-rented arrangement, though the process involves specific costs and steps at each stage. **How staircasing works in principle** When you first buy a Shared Ownership home, you typically purchase a share of between 10% and 75% of the property's value (depending on the specific scheme and your finances), paying a mortgage or cash for that share and rent (typically around 2.75% a year) on the remaining share owned by the housing association. Staircasing lets you buy further shares later, reducing the rented portion and increasing your owned percentage. **Smaller staircasing increments under newer rules** Older Shared Ownership leases often required staircasing in relatively large increments (commonly 10% at a time), but newer-model leases (introduced from 2021 onwards) allow staircasing in increments as small as 1% a year in many cases, making it more accessible for leaseholders to gradually increase their share without needing to save a very large lump sum for each staircasing transaction. **How each staircasing transaction is valued** Each time you staircase, the property is professionally revalued (at your cost), and you pay the CURRENT market value of the percentage share you are buying, not the original purchase price -- if the property has increased in value since you first bought your share, staircasing later becomes more expensive in cash terms for the same percentage, even though your existing owned share has also increased in value correspondingly. **Worked example** Someone buys a 40% share of a property originally valued at £250,000, paying £100,000 for their share and rent on the remaining 60% (£150,000) owned by the housing association. Some years later, the property is revalued at £300,000 when they decide to staircase to 60% ownership (buying a further 20% share). This further 20% share is now valued at 20% of £300,000 = £60,000, reflecting the property's increased value, not 20% of the original £250,000 purchase price. **Costs involved in staircasing** Each staircasing transaction typically involves a professional valuation fee, legal fees (since it is a formal transaction changing the ownership split), and potentially a new or adjusted mortgage to fund the additional share purchased -- these transaction costs mean very frequent, very small staircasing increments may not always be cost-effective once fees are factored in, despite newer leases permitting smaller percentage increments. **Reaching 100% ownership** Most (though not all -- some specific developments, such as certain rural or designated protected areas, may cap staircasing below 100%) Shared Ownership leases allow staircasing all the way to 100% ownership, at which point you own the property outright, pay no further rent to the housing association, and (in many cases) the lease can be extended or the freehold acquired, similar to buying any other leasehold property outright. **Stamp Duty Land Tax and staircasing** Buyers can choose to pay SDLT either on the full market value of the property upfront when initially buying their first share (a "market value election"), or pay SDLT in stages as they staircase -- this choice affects the total SDLT paid over time and should be considered carefully with a conveyancer at the point of the initial purchase, since it cannot easily be changed retrospectively. **Practical tip** Before staircasing, get a clear breakdown of the valuation, legal, and mortgage costs involved for the specific percentage increment you are considering, and compare the overall cost-effectiveness of staircasing in smaller frequent increments versus saving for a larger single staircasing transaction, since transaction costs can make very small, frequent increments less efficient overall.

Try the calculator