Thinking of Staircasing?
'Staircasing' is the term used for buying more shares in your shared ownership home.
Your lease determines how and when you staircase. If you’re thinking about staircasing have a good read of your lease to make sure you understand how staircasing applies to you. Usually you can buy shares in minimum tranches of 10%, and usually you can buy all the shares. Occasionally there will be a restriction on some properties which will mean you cannot buy all the shares and your lease will confirm this.
As you staircase and your share in your property increases your rent to Viridian reduces. If you staircase to 100% you will not have to pay us any rent.
When you staircase your service charge is likely to remain the same.
If you live in a flat and staircase to 100%, many of the shared ownership rights and obligations e.g. rent payment, no longer apply but you will still need to pay service charges.
If you live in a house its likely that once you own 100% you will become the freeholder, in most of these cases you will no longer have to pay service charges, check with us for further detail.
When you staircase you buy the additional shares at the current market value.
When you’re ready to staircase you’ll need to complete and send to us a Staircasing Instruction form (SC2). Once we’ve received your SC2 we’ll pass your details to a Royal Institute of Chartered Surveyors (RICS) qualified valuer who will contact you to arrange to undertake a valuation of your property. You will be responsible for arranging a convenient time for the valuation to take place and for paying the valuers fees.
The valuation is only valid for a certain period of time (usually 3 months) after which the valuation will need to be reviewed if your staircasing has not completed. This will involve obtaining an updated valuation letter from the original valuer, for which there may be a charge. Alternatively, you may request a new valuation, although this may be a more expensive option.
A copy of the valuation report will be sent to you to be reviewed along with confirmation from us of the price of the shares you wish to buy, and your monthly rent and service charges once you have staircased. You’ll confirm you wish to proceed with the staircase by completing and returning the confirmation form, known to us as an SC6.
Note: Any alterations or improvements carried out on your property will need to be outlined on your SC2 form. We’ll then pass this information to the valuer who will then disregard those alterations/improvements in his valuation.
We like to make sure that if one of our leaseholders wants to buy more shares that they can afford them, this helps prevent them from getting into financial difficulty further down the line. Therefore an independent financial assessment will need to be completed prior to issuing the legal paperwork for your staircase (with the exception of staircasing to 100%).
As part of the staircasing process you will be responsible for paying for:
- the valuation fee
- Viridians staircasing fee (£350 or £400 depending on the shares you are purchasing)
- your own solicitors fees.
You may also need to pay stamp duty and any potential mortgage costs, this will vary from case to case, ask your solicitor and mortgage advisor for further details.
If you intend to fund your purchase of additional shares with a mortgage we would advise you to seek independent mortgage advice. If you’re going to purchase further shares using your current mortgage provider then its worth talking to them as early as possible.
We recommend you do all of your sums before deciding to staircase to ensure you have enough money to cover all costs throughout the process.
How long will it take?
We estimate that the staircasing transaction takes around three months once you have completed and returned the SC2 form. However sometimes this process may take longer.
If you would like any further information on staircasing, please contact the Sales team at Viridian Housing
Direct Line: 0800 012 1442