Last Updated: February 2nd, 2024 at 6:39 pm
Staircasing is a unique feature of Shared Ownership that allows you to gradually increase your share in a property, moving closer to full ownership. This page will explore the staircasing process, its benefits, and practical considerations. To bring this concept to life, we will also present a case study illustrating a successful staircasing journey.
Staircasing refers to the process of buying additional shares in your Shared Ownership property. Initially, you might own a portion (e.g., 25% or 50%), and through staircasing, you can increase your share in increments. This process not only reduces the rent you pay on the remaining share but also brings you closer to owning the property outright.
You usually choose to staircase when your existing mortgage deal is nearing its conclusion, and you are looking to remortgage. The staircasing process involves several steps:
For the most part, the process is much the same as a basic remortgage!
Sarah initially purchased a 30% share of a two-bedroom flat in Bristol, valued at £300,000, for £90,000. Her monthly payments included a mortgage on her share and rent to the housing association for the remaining 70%. After five years, her financial situation improved, prompting her to buy an additional 20% share of her home, now valued at £320,000, for £64,000. This purchase reduced her rent payments significantly, as she now owned 50% of her home.
Three years later, with the property valued at £340,000, Sarah bought the remaining 50% for £170,000, achieving full homeownership. This strategic staircasing approach allowed Sarah to manage her finances flexibly, ultimately leading to her owning her entire home.
Staircasing offers a flexible approach to homeownership, allowing you to adapt to changing financial circumstances while building equity in your home. It’s a strategic tool, especially for those on a path of financial growth, enabling gradual progress towards full ownership. Remember, each staircasing step should be carefully considered in the context of current market conditions and personal finances. For further insights and assistance with the staircasing process, our experts at Green Mortgages are here to offer personalised guidance, helping you navigate this journey with confidence.