How to staircase shared ownership: a complete guide

The state of the UK housing market is such that those wanting to get a foot on the property ladder struggle because of the increasing price of homes.

While there have been a few occasions in the history of buying a home where prices have gone down, the predominant position is that prices have almost consistently gone up.

In fact, the latest Halifax House Price Index (as published 7 January 2025) shows that the average house price is almost £300,000, and, comparing house prices with those when records began in 1992 indicates that these have risen five-fold in that thirty-year period.

The problem for many first-time buyers comes with finding the deposit (usually 5%-10% of the asking price) in order to get into the property-buying business.

This is coupled with the improbability of finding the repayment amount each month for the mortgage loan. And that's after the rising cost of renting a home swallowing up any remaining amount, which means they simply can't save the required amount. 

In addition, the rise in house prices over time is far in excess of the rate at which the average pay has risen, which opens up an ever-growing chasm that becomes almost impossible to fill using traditional ways of buying a home.

This explains the focus that mortgage companies, the Government and other bodies have applied in finding ways to help frustrated buyers to get that foothold on the property ladder. 

One such process is Shared Ownership.

Shared Ownership is a Government-run scheme designed to help those who are unable to afford the deposit or the mortgage repayments for a particular home that meets the prospective buyer's needs.

The purpose of the scheme is for the buyer to purchase a share of that property, while paying rent to a landlord for the value of the remainder. 

When buying a home in this way, you agree to buy a percentage of the home's full market value, and pay a rent to the landlord to cover their share, and, depending on the agreement, paying a monthly fee for ground rent and service charges (e.g. to cover the cost of the maintenance of communal areas along with others).

Note that there are some differences for the Shared Ownership scheme in Wales.

Shared Ownership does not mean that you will be required to live with someone else; the definition is solely to describe the ownership of the deeds and how it is proportionally shared between you and the landlord.

The scheme allows you to buy a specified new-build home, an existing property through a Shared Ownership resale scheme or a home that meets your specific needs (for example, a disability requiring a ground-floor flat, or a flat that has to be accessible by a lift).

The idea of a landlord conjures up different images, but, for the Shared Ownership scheme, the landlord is usually a controlling body, such as a housing association, the local council and other housing organisations. For the purpose of the scheme, too, any home made available through it is sold as a leasehold property.

If you are eligible for the scheme, you will be able to buy your share for around 25% to 75% of the property's market value - a value that is established through an independent chartered surveyor. Some properties may also be available for as low as 10%, but you'll need to do some research to find them. 

In addition, you'll need to find the money for a deposit, which is usually positioned at between 5% and 10% of the value of your share (rather than the full market value). 

Correspondingly, the amount of rent you pay to the landlord will be calculated according to the value of the share that they own.

If you have opted for buying a home through the Shared Ownership scheme, you need to be aware that you are responsible for its repairs and maintenance, no matter the level of your ownership in it. 

However, some repairs might be covered under the terms and conditions laid out in the Key Information Document, which comes with the property and lays out the responsibilities of you as the owner and the landlord, specifically detailing the initial repair period and what that covers.

Assuming that none of those apply, you will be responsible for the maintenance, which is something that you'll need to factor into your budget.

Another difference from straightforward renting is that you are allowed to decorate the property and carry out improvements such as installing a new kitchen or replacing the bathroom.

But, when it comes to making structural changes (for instance, removing an internal wall), you might be required to obtain agreement from the landlord first, and this information can be sought from them prior to starting any planned work.

When the Shared Ownership is set up, you'll be advised whether there is an initial repair period, under which terms the landlord is responsible for carrying out certain repairs to the property, but you'll still need to pay for the service charges and the initial repair period is no longer available to you if you go on to fully own the property.

When it comes to external repairs on a new-build, structural or otherwise, you should check the building warranty to ensure it is still valid, since most remedial work will be covered under its auspices.

If you are in a flat, it is the landlord's responsibility to organise any structural work, the cost will be covered by a reserve fund or spread between all of the flat-owners - the Government advises that you should verify the position with your conveyancing solicitor. The cost of safety remedies (such as problem cladding) may require you to pay an amount towards it.

The biggest difference with this scheme over any other ways of owning a property is that you'll be given the opportunity to increase your share of the ownership over time, in a process which is known as ‘staircasing'.

As the name suggests, ‘staircasing' is a number of steps upwards to owning the majority or total of the property that you bought under the Shared Ownership scheme.

All the while that you don't own 100% of the property, you will still have to pay rent to the landlord (and all other provisions remain in place).

But the beauty of the scheme means that, when you're staircasing, you will be paying less rent, since it is calculated on the residual share that the landlord owns.

So, the more you own, the less rent you'll be required to pay.

The simple process is:

Decide whether you want to step up

This is usually set at 10% or more. You can choose to step up at any time. Some newer leases will allow you to buy shares at 5% or more, so it's worth checking your terms and the Key Information Document, available from your landlord. 

Some leases may even allow you to buy at 1% increments (although you won't be able to buy at 2%, 3%, or 4%. Although you will likely be allowed to buy further shares at any time, the documentation will also highlight the starting date from when you may start purchasing them.

Inform the landlord

Once you have decided that you want to go ahead with buying extra shares in the home, you should formally involve the landlord, giving details of your intention to buy the shares.

Decide on the value you want to buy

There are constraints on what you can buy and when, but there is also the affordability aspect.

The cost of the chosen share will be based on the market value of your home at that point. From this, you can calculate the percentages and verify your affordability.

Decide how you are going to pay for the share

You'll obviously need to understand how you will finance the project of buying the additional share, whether it's by obtaining a loan from a mortgage company or bank, or by borrowing from a friend or family member. 

You might also want to look at taking some of the equity out of the portion of the home you already own. 

However you decide to provide the funds, it's wise to talk to a financial adviser to ensure you are not setting up problems for the future, while loans against the property will also need legal advice and management from an expert solicitor.

Appoint a chartered surveyor 

Aprofessional market valuation of the property as it currently stands from a Chartered Surveyor will need to be ordered, which is either the landlord's or your responsibility to organise. 

Note that, if you have made any home improvements (e.g. upgrading the bathroom or installing a fitted kitchen or en suite), you will need two valuations - one that includes the value with those improvements, and another without them.

This is important because, if you have written approval for the improvements from the landlord, the value of the shares you're buying will be based on the unimproved valuation, but, if you don't have the written authority, it will be based on the improved valuation, which is likely to be the higher of the two. 

If the landlord has arranged the independent valuation, they will inform you of the cost of the chosen additional share based on that valuation.

Appoint a conveyancing solicitor

Because you are essentially buying a property, or at least part of it, the details of the change in ownership will need to be updated.

Because of the legal applications and the transfer of monies involved, it is essential that you involve a conveyancing solicitor as early as possible so that your interests are fully protected. 

Note that the landlord will be responsible for paying their own legal fees in the purchase process.

Purchase the additional share

Be aware that the landlord may charge for any purchase of shares that are at 5% or more, which they will set and details of which can be found in the Key Information Document.  

If you want to go ahead with the share purchase, you must complete the process within three months of the valuation date; otherwise, you'll have to go over the same process again.

Buying a 1% share

For Shared Ownership homes purchased after 1 April 2021, you may be able to buy a share at just 1%, the details of which will be confirmed in the Key Information Document. 

If you are eligible, you can buy a 1% share each year for 15 years that you own the property - this value is based on the original price of the property that you bought it, adjusted according to the latest House Price Index as published monthly by the Office for National Statistics. 

This can be overridden by a professional valuation, which can be requested by you or the landlord - whoever demands the survey will be responsible for the associated fees. 

Note that you won't be able roll unused allowances into following years (for example, not buying a share one year won't allow you to buy 2% the following year).

It may sound an obvious statement, but the maximum ownership you can expect is 100%.

This is important to understand since there are some exceptions, such as what is known as a ‘designated protected area', where you can only buy up to 80%.

Again, this is something that you should make yourself aware of at the outset. If in doubt, ask your landlord for more information.

When you have opted for the Shared Ownership scheme, staircasing has a number of positive points to consider:

Ownership increases

The most obvious advantage is that you will incrementally own more of the property in the long run.

100% ownership

Aside of the limitations in some instances, you will be able to own 100% of the property, which means zero rent to be paid to the landlord and you'll be on a leasehold footing.

Money management

With staircasing, your mortgage costs will increase as you buy greater shares in the property, while the amount spent on rent to the landlord for their portion will decrease. 

Although you will have to consider the size of the mortgage repayments, ultimately, this is an investment for the future rather than simply paying bills to the landlord.

Mortgage options

The greater the proportion that you own in the property, the wider the variety of mortgage options there are for you to consider, which includes the ability to remortgage against your current share to take up a less expensive loan overall.

Do nothing option

The beauty of the scheme is that you already own a portion of the home and, if you decide that you don't want to staircase, there is no compulsion from anyone including the landlord for you to do so. 

You can also decide to staircase one year and then not the for the next year, two or more - it's entirely in your hands for you to manage it without any pressure from external sources.

One of the key considerations is obviously the cost of the staircasing enterprise - not only of the amount of the share that you are planning to buy but also the fees for your surveyor and the conveyancing solicitor, which is why it is critical to choose a solicitor who will be focused on your transaction and will not charge any fees if you don't reach completion successfully for any reason.

You should also look at the stamp duty rules that might apply - if the size of the share you are buying is sufficiently high, you may go over one of the stamp duty thresholds and this is a mandatory payment (managed by your conveyancing solicitor) to HMRC. 

At the start of the Shared Ownership process, you will have had the option of paying Stamp Duty as a one-off charge or as an increment that is dependent on the size of share in the staircasing process. However, if paid by increments, this payment will only be triggered at the 80% point.

Although staircasing is usually unlimited in the number of times that options to buy shares can be taken up, there may be certain limitations that might be applied in certain cases, so it's worth checking the provisions for staircasing in the Key Information Document.

When it comes to selling the home, this can be done at any time, regardless of whether you have completed or even started the staircasing process.

To sell the home, you will need to contact the landlord to confirm your intention to sell, which will be followed by an independent professional valuation to determine how much the property is worth. 

If you don't own 100% of the property, your landlord may take the option of using a set period of time (usually defined as being around eight weeks) in which they will preferentially market the property, following the same process to find a buyer as when you first bought your share in it .

Once this period has passed, you will be able to sell the property yourself through the usual means (e.g. an estate agent). As a consequence, if the landlord has been unable to organise a sale, the elapsed time may be longer for you than that of a standard sale.

If you are looking at Shared Ownership or are interested in staircasing on one you already have Shared Ownership in, you will need to have experienced legal representation.

The experts at Homeward Legal are well-versed in all aspects of the conveyancing process, including Shared Ownership and staircasing, providing a quality conveyancing service at a fee that is great value for money!

Call  to get your conveyancing quote started, or to discuss your concerns with your plans to purchase or sell your next home.