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Staircasing Valuations: A Guide
If you own part of your home through shared ownership, buying more shares is called staircasing. This guide explains how the price is set and how the valuation works.
How much can I buy?
Your lease sets the size of share you can buy. Your landlord's key information document sets it out clearly.
- Most leases let you buy shares of 10% or more at any time.
- Some older leases only allow shares of 25% or more.
- Newer leases may allow shares of 5% or more.
- If you bought on or after 1 April 2021 and your lease allows it, you may also be able to buy a 1% share each year for the first 15 years.
Shares of 2%, 3% or 4% can't be bought. Some homes have a limit on how much you can own: 80% in designated protected areas, and 75% for older persons shared ownership.
How the price is worked out
For shares of 5% or more, the price is the share you're buying multiplied by the market value of the whole home, as set by an independent RICS valuation. For example, buying a further 25% of a home valued at £300,000 costs £75,000.
For 1% shares, the landlord works out the price from the original price adjusted by the House Price Index, so no RICS valuation is needed. You can ask for an RICS valuation instead, but whoever asks for it pays for it.
When you buy more shares, the rent you pay on the part you don't own goes down.
Improvements you've made
If you've improved your home, for example with a new kitchen, bathroom or extension, the valuation shows two figures: the value as it is now, and the value without your improvements.
- If your landlord gave written permission for the work, you pay for your new share at the value without your improvements, so you don't pay again for work you've already paid for.
- Without written permission, the price is based on the value as it is now, which is likely to be higher.
Have your permission letters, with dates and invoices, ready for the chartered surveyor.
The valuation
The valuation must be carried out by an RICS registered valuer. Your landlord will tell you whether they arrange it or you do. Some housing associations, including Notting Hill Genesis, ask you to choose a chartered surveyor from their own panel.
The chartered surveyor inspects your home and reports its market value as if you owned all of it, with vacant possession, supported by recent sales of similar homes nearby. The valuation is of the whole home on the open market: it isn't reduced because the home is shared ownership.
The valuation is valid for three months. If your purchase hasn't completed by then, the home will need to be valued again.
If you think the valuation is wrong, write to the chartered surveyor with details of sales of similar homes that support your view, and ask them to reconsider.
Step by step
- Check your lease and key information document for the share sizes you can buy.
- Tell your housing association you'd like to buy more, and ask how the valuation is arranged.
- Arrange your mortgage, if you need one, and a solicitor.
- The valuation is carried out, and your housing association confirms the price.
- Complete the purchase within three months of the valuation.
Your landlord may charge an administration fee for purchases of 5% or more, and you pay your own legal costs. Stamp Duty Land Tax may be payable on some share purchases; your solicitor will advise.
Selling your shared ownership home
If you're selling, a valuation sets the price your share is offered at. Your housing association usually has a period to find a buyer first (the nomination period, set by your lease) before you can sell on the open market.