Can 'Staircasing' help you buy a Shared Ownership property outright?
To find out more about how staircasing can help you own more of your home over time, check out our handy guide.
Shared Ownership is a great option for people who want to buy a home without saving up for a lifetime. However, buying a Shared Ownership home is about far more than just owning part of your property. If you want to own 100% of your home one-day, Shared Ownership is also an affordable way to buy your property outright.
But how can you go from Shared Ownership to full home ownership? That’s where the ‘staircasing’ process comes into effect. To find out more about how staircasing can help you own more of your home over time, check out our guide to staircasing:
Are you eligible for Shared Ownership?
Shared Ownership is a great way to make your dream of home ownership possible, but the scheme is only available for a lucky few. Well, maybe not quite so lucky - to take advantage of the scheme, you have to be unable to purchase a home on the open market. This means if you are on a household income more than £90,000 in London, and £80,000 elsewhere in the UK, you won't be able to take part.
Shared Ownership is mainly targeted at first-time buyers, but this doesn't rule out people who have bought before. You just need to make sure that you are in the process of selling your other property, and pass the other key eligibility requirements.
How do you start the Shared Ownership process?
Great - so you’ve passed the eligibility requirements and made it to the next step! To get the process up and running, you’ll first need to register interest in your dream Shared Ownership property.
Using the scheme, you’ll be expected to pay a small deposit towards the share of the home you buy and pay subsidised rent on the part you don’t yet own. Once you’ve lived in your home for a set period of time - usually 1-2 years - you can start the exciting venture of buying more shares through ‘staircasing’.
How much does Shared Ownership cost?
Shared Ownership is billed as an affordable way to buy a home, but how much does it all cost? Well, that depends on the value of your property, as well as the size of the share you are buying. Usually, you’ll need to start by buying a minimum 20% share of the home, which would be £60,000 if you are buying a home worth £300,000.
If you decide to put down a 10% deposit, this will work out as 10% of £60,000 = £6,000. You’ll then be expected to pay subsidised rent on the share still owned by your housing provider, which is normally 3% of the value of this share.
What is staircasing?
Staircasing is a process that allows you to buy more shares of your Shared Ownership home over time. For example, if you originally owned 20% of your property, buying an additional 10% share will take you up to 30% ownership of your home. More ownership of your home means that your mortgage repayments will go up, while the cost of your rent goes down. Once you own 100% of your home, you won’t have to worry about paying any rent!
How much does it cost to staircase in Shared Ownership?
On average, the cost of buying another share of your home is around £2,000. However, this all depends on the size of the share you buy, as well as the value of your property - the pricier it is, the more you can expect an additional share to cost. Staircasing is like buying a tinier version of your house, so make sure you budget for additional costs like surveys, solicitor fees and potentially even stamp duty.
What are the benefits of staircasing in Shared Ownership?
If you are looking for a manageable way to own your home in the future, staircasing is the best way to make it happen. Not quite ready to buy more shares of your home? Don’t panic - there’s no obligation to buy more shares straight away, so you can do this whenever you’re ready.
Staircasing doesn’t just bring you closer to your goal of a dream property - it also makes it easier to pay in the long run. When you buy more shares, the cost of mortgage repayments will go up, but the amount of rent you pay will decrease! If you plan to sell your home in the future, owning 100% of your property means you’ll get to enjoy all of the profits of your home’s increased value.
Looking forward to owning all of your home? With a selection of Shared Ownership homes in West London, BE WEST can make your home-buying dreams a reality. Check out our property search to find your future home today!