Buying More Shares in Your Home
If you are a shared owner and decide to buy a greater share in your home this is known as ‘staircasing’. There will be costs involved in this process including the valuation fee, your solicitor’s fee, Hexagon’s administration fee and any charge made by your mortgage provider. Your lease will give you information on how soon after buying your home you can apply to ‘staircase’.
Depending on the wording of your lease, you can increase your share by as little as 10% or 25%. The amount you will have to pay for this further share will depend on a valuation of the property.
If you are the shared owner of a house, once you have staircased to 100% the Freehold will be transferred to you.
Financial Implications
As a shared owner you pay rent for the share you do not own. If you live in a flat, or in a house with communal grounds or areas, you will also pay a service charge.
If you buy a further share in your home the amount of rent you pay will reduce, but if you buy the extra share using a mortgage, your mortgage payments will increase. Once you own 100% of the equity in your property you will not pay any rent. The service charge will stay the same.
Even if you become the freeholder of your house there may be covenants attached that will require you to pay a service charge for the upkeep of any communal areas.
How to ‘Staircase’
- Let us know in writing that you are thinking of ‘staircasing’.
- We will arrange for the property to be valued by an independent Valuer. You will have to pay for this valuation.
- When we receive your payment for the valuation we will arrange for the Valuer to make an appointment with you to look at your home.
- When we receive the valuation report we will let you have a copy.
- You will then tell us in writing whether you would like to go ahead, and what further share you would like to buy.
- You then have three months to complete the purchase. After three months a new valuation will be needed.
Selling Your Home
If you own 100% of your home you can sell it on the open market and we do not need to be involved in a formal valuation of the property. However, under the terms of your lease you must always let us know if you are thinking of selling, as we may wish to buy back from you. This could save you thousands of pounds in estate agents fees.
Your solicitor will send us a Notice of Assignment once the sale has gone through so that we know who the new owner is. If this doesn’t happen you will stay liable for service charges and arrears.
Sale by Shared Owner
If you would like to sell your property and you do not own 100% of the equity, you must let us know in writing that you would like to sell. We then have a period in which to nominate one or more potential purchasers. Your lease will tell you how long this period is. The price paid will be the market value of the share being sold (as outlined above in the section entitled ‘How to Staircase’). There will be a charge for selling your share. The calculation of this charge is set out in your lease.
If we do not nominate a buyer you can then sell your share of the property on the open market at the market value. In practice, many shared owners staircase to 100% and sell the property simultaneously. Your solicitor will advise you on the options.
