Shared Ownership Staircasing: Costs, Rules and Examples

Staircasing means buying more of a shared ownership home. As your ownership share rises, the rent charged on the housing association's remaining share normally falls. But whether staircasing is worthwhile depends on the share price, your borrowing costs, your lease and how long you plan to stay.

There are also important differences between older leases and newer shared ownership models. This guide shows how to calculate the costs, when you can buy 1% rather than a larger chunk, and how to fund the purchase.

How shared ownership staircasing works

Suppose your home is worth £300,000 and you already own 40%. If you buy another 10%, you are usually purchasing £30,000 of additional equity at the current valuation. Your ownership would increase from 40% to 50%; the housing association's share would fall from 60% to 50%, and the rent charged on that remaining share would usually reduce.

The share price generally uses the property's current market value, not the price you originally paid. If the value rises, buying the next share normally costs more. Always check the staircasing provisions in your lease and ask the housing association for its current process.

Can you staircase by 1%, 5% or 10%?

It depends on the scheme and lease, not simply the date you moved in. Under older shared ownership models, standard increments were often 10% or, on some older leases, 25%. Newer-model homes funded through relevant programmes can permit traditional staircasing in chunks of 5% or more.

Some eligible newer-model leases also allow an additional 1% share each year for the first 15 years. You generally cannot combine unused annual 1% allowances or buy 2%, 3% or 4% through that specific gradual route. A 1% staircasing purchase normally uses a House Price Index-based valuation and has no housing-association administration fee, although other costs may still arise.

The rules are not determined solely by whether you bought after April 2021: funding programme and lease terms matter. GOV.UK's staircasing guide explains the models.

How are extra shares valued?

For traditional staircasing transactions, the housing association will generally require a current valuation from a RICS-registered surveyor. A valuation normally has a limited validity period, so arrange your mortgage and legal work promptly.

Under qualifying 1% gradual staircasing schemes, the valuation usually follows the relevant house price index. Your lease and provider documents determine the exact process. If you've made improvements, tell the valuer and housing association — authorised improvements may affect how the additional share price is calculated.

What are the additional costs of staircasing?

• Purchase price of the extra equity at the applicable valuation.

• Surveyor/valuation fee, where required.

• Solicitor or conveyancer fees and any housing association administration charges.

• Mortgage product, valuation, broker or arrangement fees where applicable.

• Potential Stamp Duty Land Tax, depending on your original election and the share you reach.

• Any early repayment charge if you change or repay an existing fixed-rate mortgage early.

Does staircasing trigger Stamp Duty?

There are two common ways Stamp Duty Land Tax is handled when initially purchasing shared ownership in England and Northern Ireland: making a market value election on the full property value, or paying tax in stages. The treatment of later staircasing depends on which route was chosen.

Where no market value election was made, further SDLT is generally not due on staircasing transactions until the share exceeds 80%. The transaction that takes you over 80% and subsequent transactions may then be chargeable. The calculations can be complex, so your conveyancer should review your original purchase documents before you commit.

Read HMRC's shared ownership Stamp Duty guidance for the detailed rules.

Should you use savings, a further advance or a remortgage?

You may be able to use savings to buy the new share, increase borrowing with your current lender or remortgage to a different lender. A further advance can avoid disturbing an attractive existing fixed rate, while a remortgage may offer a better overall deal if charges and eligibility make sense.

Your lender will assess affordability for the increased borrowing, taking account of mortgage payments, remaining rent, service charges and your wider commitments. A mortgage repayment calculator can illustrate monthly costs, but a full lending assessment is still needed.

Is staircasing worth it? A worked way to think about it

Using the £300,000 home above, a 10% share would cost around £30,000 before fees. If you fund it with a mortgage, compare the increase in mortgage payments with the decrease in rent and the transaction costs. Do not ignore the fact that mortgage capital repayments build equity while rent does not.

Also consider future rent increases, house-price movements and how long you expect to own the property. Service charges often remain payable regardless of your share and may not reduce when you staircase.

Owning a higher share gives you more exposure to property price rises and falls. Staircasing to 100% can simplify a future sale, but some schemes restrict maximum ownership or retain particular lease conditions.

Can you staircase to 100%?

In many schemes, yes. But certain designated protected areas limit ownership to 80%, and Older Persons Shared Ownership has different limits. Where you can reach 100%, rent on the unsold equity generally ends, although leasehold service charges and other obligations can continue.

Some shared owners use a coordinated staircasing-and-sale transaction, sometimes called back-to-back staircasing, when selling. Your solicitor and housing association must agree the mechanics.

Frequently asked questions

Can I staircase with a gifted deposit? Often yes, subject to lender and housing-association requirements. See our gifted deposit guide.

Can I staircase during a fixed rate? Possibly through further borrowing, but a full remortgage can trigger an early repayment charge. Compare options first.

Does service charge disappear at 100%? Not necessarily. Leasehold service charges can remain even once your rented share reaches zero.

How long does staircasing take? Timing varies with valuation, housing association, mortgage offer and conveyancing. Get documents ready early.

Plan your next share purchase

Our shared ownership mortgage advisers can review the mortgage options alongside your housing association's terms and help assess whether the rent saving justifies borrowing more. Contact Drummonds or call 0330 133 0034.

Your home may be repossessed if you do not keep up repayments on your mortgage.