When you staircase to 100% ownership, you will not have to pay rent to us but you may still need to pay ground rent, service charges, or estate maintenance charges if you own a house.
Some leases may limit the maximum share you can purchase e.g. 80%. This is to ensure that affordable housing is still available within your area.
The First Step
The first step in the process is to work out whether Staircasing is a viable option for you. This will depend on several factors including your financial circumstances and your property value.
SRC Mortgage Solutions or one of our other recommended mortgage advisers can provide an initial Staircasing appraisal free of charge, which will confirm whether you can staircase and provide an estimate of costs.
Read our step-by-step guide to Staircasing below, to be informed of everything you need to know when buying more shares in your Shared Ownership home.
3 simple steps when Staircasing
Step 1 – Initial Appraisal
Contact our partner mortgage advisers SRC Mortgage Solutions or another recommended mortgage adviser from our panel, for a free no obligation appraisal. They will confirm whether staircasing is possible and provide you with an estimate of the costs.
Please check with your specific mortgage adviser for costs involved in the appraisal process.
Step 2 – Notify your Housing Association
You will need to contact Peabody to let us know that you'd like to buy more shares in your Shared Ownership home. We will require you to complete a Staircasing Instruction Form and ask for the property to be valued.
The valuation will need to be conducted by a RICs qualified surveyor, which you will need to pay for. Please remember that if you decide not to proceed after the survey has been completed you will not receive a refund.
Step 3 – Buying More Shares
Your financial adviser will advise you on the additional share that you can afford to purchase. If you are not Staircasing to 100%, we will require you to complete a financial assessment to check that the additional share purchase is affordable (this is something they will help you with).
Now you will need to appoint a solicitor. We would recommend you use a firm that is familiar with shared ownership and can provide details of firms that can assist you.
Find a Shared Ownership Home with Peabody
Shared Ownership is a part buy/part rent scheme designed as a stepping stone for first time buyers looking to completely own their own home.
Peabody offer a range of Shared Ownership homes around London and the South East.
Frequently asked questions about Staircasing
How is the share price calculated?
The share price is calculated on the current market value of the property. For example, if you wished to buy a further 20% and your property is valued at £500,000, the purchase price will be £100,000.
How can I purchase more shares?
Most people buy more shares by increasing their mortgage, but you can use cash if you have surplus money available. If your employment circumstances have improved, it is likely that you can increase the amount you can borrow.
What about my rent?
As your share of the property increases the rent you pay decreases. With interest rates at historic lows, you may find that buying more shares is affordable.
Remember you may still need to pay ground rent and service charges if you own a flat.
What is the minimum share I can buy?
The minimum share you can purchase is normally 10% but you will need to refer to your lease to confirm this. The lease may also restrict the number of times you can staircase.
Alternatively, you can staircase to 100% if affordable and your lease permits this.
What costs will I have to pay?
The initial appraisal offered is usually free of charge and without obligation, but each mortgage adviser costs vary so please check with your specific lender.
However, if you decide to staircase then you are likely to incur the costs itemised below.
- Valuation fee (payable upfront and non-refundable)
- Peabody administration fee (normally payable on completion)
- Solicitor fees
- Mortgage fees
You may also be required to pay Stamp Duty Land Tax. Your solicitor can provide further advice on this matter.
Article credit: Simon Torry at SRC Mortgage Solutions.