What is staircasing? Understanding staircasing for buying and selling property in the UK

Staircasing is a term commonly used in shared ownership schemes to describe the process of gradually increasing the percentage of a property you own. It allows buyers to purchase additional shares in their property, typically from a housing association or a through their shared ownership scheme.

In this guide, we’ll explain what staircasing is, how it works when buying a property, and how it works when selling a property. We’ll also help you understand the impact of staircasing on property ownership and how it can benefit both buyers and sellers.

In this article:

What is staircasing?

Staircasing is a process where a homeowner increases their share in a property, often within a shared ownership scheme, by buying more of the property from a housing association or developer.

Initially, when you purchase a shared ownership home, you typically own a portion of the property (e.g., 25%, 50%, or 75%), with the rest owned by a housing association or a landlord. Staircasing property allows you to buy additional shares of the property until you eventually own 100% of it.

The main benefit of staircasing is that it allows you to gradually increase your equity in a property over time without having to save for a full 100% deposit upfront. However, it’s important to understand the terms and conditions of your shared ownership agreement, as certain restrictions may apply.

What is an example of staircasing?

If you originally purchased a home with a 25% share and are now looking to staircase to buy an additional 25%, you’ll then own 50% of the property. This process enables you to increase the percentage share you own, sometimes even up to 100% ownership. Find out about exceptions here.

The process works as follows:

Keep in mind that the price of the additional shares may fluctuate depending on the current market value, and there may be fees associated with each staircasing transaction. It’s essential to check with your housing provider for specific guidelines on how staircasing works in your shared ownership scheme.

What are the benefits to staircasing?

Staircasing might be a good idea if you’re looking to:

How does staircasing work when buying a property?

You can buy a shared ownership homes through either buying a new build or buying a slightly older properties that had shared ownership through its  original owners, who are now selling. You can usually staircase in increments of 12.5% or 25% depending on the Housing Association who own the property. Shared ownership homes are always leasehold – meaning the Housing Association owns the property and land until you staircase up to 100%, at which point the property may become freehold depending on the legal title. Read more on the difference between freehold and leasehold.

How does staircasing work when selling a property?

This happens on a sale, when you own a certain percent, however the buyer wants to own a greater share. For example, you own 25% and rent the remaining 75% from the Housing Association, however your buyer wants to own 50%. You would staircase up to 50% on completion, although your buyer is the one who actually pays the Housing Association this additional 25%, not you. This is because the additional share needs to be purchased as part of the transaction rather than after the sale.

It’s important to remember what level of Stamp Duty Land Tax (SDLT) you paid when you first bought your home – you may have chosen to pay SDLT only on the share that you first owned, meaning that even though you’re now the seller, Stamp Duty would be due from you for the remaining market value of the property if/when you staircase to own over 80%. Most people forget about this (or may not have been given full advice at the time) and it gives them a bit of an unwanted surprise. Don’t forget, first-time buyers under a certain purchase price are currently exempt from stamp duty, so this may not apply to you.

Most Housing Associations will also want to approve the additional share being bought, and some Housing Associations will have a limit that a maximum of 75-80% of the property can be owned, although you should be aware if this applies as it would have been part of the terms when you purchased.

You may also be required to obtain a valuation report to send to the Housing Association at your expense, which usually costs around £200. A RICS valuation is a survey of the property to understand the property’s true current value.

What are the common pitfalls?

A third solicitor will enter the usual mix of two (the buyer’s and the seller’s). This third lawyer represents the Housing Association as they have a stake in the property. This can sometimes slow things down a little as it brings an extra party into the process, and more paperwork.

The seller will usually find themselves responsible for paying the legal fees for this third solicitor at the request of the Housing Association (although this is usually a reasonable fee around a few hundred pounds.)

It is also worth remembering that the price of the additional shares may rise as the property’s market value increases, making it more expensive to staircase over time. Also, some schemes may limit how often or how much you can staircase, or they may require you to staircase to 100% within a certain time frame.

Staircasing tips and advice

Staircasing FAQs

Explore answers to the most common questions around staircasing.

Can I staircase multiple times?

Since September 2011 – there are no restrictions on the number of staircasing applications that can be made. If you purchased before this date, you’re allowed three purchases and the final one must result in you owning 100%.

Each time you staircase, you’ll pay the current market value for the share percentage you wish to buy.

How much does staircasing cost?

The cost of staircasing can vary depending on several factors, like the amount of shares you’re buying, property type, location, etc. However, the typical costs for staircasing include:

Can I get a staircasing mortgage?

If you meet the eligibility criteria, you can get a mortgage specifically for staircasing in a shared ownership property that could enable you to buy more shares in your home. Find out how to get a mortgage.

Are there any restriction to the amount I can staircase?

According to gov.uk, in some places called ‘designated protected areas’, you may only be able to buy a share of up to 80%. However, for most shared ownership homes you can gain complete ownership.