Yes, in most cases you can fully own a shared ownership property. You do this through a process called ‘staircasing’ which involves purchasing additional shares in your property over time, usually in batches of 10% or larger. You can do this gradually until you reach 100% full ownership.
In this article, we’re going to explain a little more about purchasing 100% of a shared ownership property and any limitations you may come across on your staircasing journey.
How much of a shared ownership property can you buy initially?
In many cases, your initial purchase of a shared ownership property will be somewhere between a minimum of 25% and a maximum of 75% of the property’s agreed market value. These maximum and minimum limitations may vary between different Housing Associations and properties.
How large a share you purchase will ultimately depend on what you can realistically afford, and a good mortgage advisor and broker, such as us here at Mortgage Light, will be able to help you work this out after conducting a financial assessment.
Find out more – ‘How much of a deposit do you need for shared ownership?’
When can I start staircasing with shared ownership?
It is usually the case that you can only begin staircasing after you have owned a share of the property for an agreed minimum fixed period of time. If this applies, it will be detailed in your lease contract. Once this initial restricted period is up, you are free to make an application to purchase further shares in your property and go through the staircasing process.
Before changes were made to staircasing in September 2011, you could only make three applications to buy more shares in your home. Today, however, you are usually free to staircase as often as you’d like to. But be aware that staircasing can be an expensive and lengthy process. Therefore, you may not want to go through it too many times. It’s generally advisable to save up and staircase less often, but purchase larger chunks on each occasion.
Find out more – ‘Shared ownership – how does staircasing work?’
What happens when I staircase to 100% ownership?
When you finally staircase up to 100% ownership, you no longer share the property with your Housing Association and you become the outright owner. You therefore no longer need to pay any rent. Instead, you will solely be paying towards repayment of your mortgage. As a result, it is likely that your mortgage borrowing will have increased to fund the larger share of the property that you own. Once you achieve 100% ownership of your property, should you want to sell and move on, then in most cases you can do so through the open market without the involvement of the Housing Association.
When can I not staircase to 100% ownership?
Sometimes, the terms of the shared ownership lease will not allow you to staircase up to full 100% ownership. However, this is fairly uncommon. Such a restriction may be imposed because the property has been adapted. The restrictions are put in place to ensure that these properties stay within the shared ownership market and don’t later get sold into the general open market.
Always check the details of your lease to see if you will be restricted on the maximum share of the property that you can staircase to. Restrictions will differ from provider to provider and the Housing Association should provide a summary of these to you if you are interested in purchasing. Your solicitor should also outline the full lease terms to you during the legal process of your purchase before you complete.
Do you dream of owning your shared ownership property? Speak to us here at Mortgage Light. We have guided so many people just like you to 100% ownership and helped them with every step of staircasing.
Get in touch today to speak to our shared ownership specialists via our website or call 01988 597655.