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How do I buy more shares (Staircasing)

Stair-casing – buying more shares in your home

Information for Shared Owners

Your Questions Answered

What is stair-casing?

Stair-casing is the term given to buying extra shares in your shared ownership property.

How does stair-casing work?

Fusion Homes have been commissioned by Howard Cottage Housing Association to act on their behalf on all shared ownership sales, re-sales and stair-casing transactions.

Most leases allow you to buy extra shares at any time after your initial purchase. You may choose to go up another step on the home ownership ladder by buying more shares in your home, this is known as partial stair-casing, or all of the remaining shares, known as final stair-casing. If you are thinking of partial stair-casing you can staircase in multiples of 10%. If you are considering stair-casing you will need to find out from your lender whether they are willing to lend you a further amount. The amount you are able to borrow will help you determine the size of the further share you are able to purchase. If you are considering changing mortgage providers you need to consider if your current mortgage has any redemption penalties.

Please note that not all leases allow you to purchase all the shares in your home. If you are unsure please ask your solicitor.

This step-by-step guide shows the different stages involved in buying further shares (stair-casing) in a shared ownership lease.

Step 1 Work out what you think the market value of your home is. Decide what share you would like to buy, and make sure you have enough money to pay for the new share, and immediately to pay your Solicitor or Conveyancer, Surveyor and our costs of £200 plus VAT.

We have a range of Solicitors and Independent Financial Advisors who can advise on what share you can buy and best mortgage products for you, contact us for more information http://fusionhomes.org.uk/uncategorized/shared-ownership-mortgage-legal-panel/

Step 2 You will need to complete the application at the bottom of this form and sent it to us with our £240 costs.

Step 3 We will acknowledge receipt and confirm that you are eligible to buy further shares.

Step 4 You arrange for the valuation to be carried. Time is now ticking you must complete the Stair-casing within 3 months of the date of the valuation, otherwise, a new valuation or an update may be required and you will have to pay the cost of this. If the new valuation is different, the price you pay will be calculated on the new valuation whether or not this is higher or lower than the original.

Step 5 Send the valuation to us and we will write to you setting out the price you need to pay for the further shares.

Step 6 You need to appoint a Solicitor or Conveyancer to act for you. We have a range of experienced conveyancing partners who can offer expert help and advice to you, along with a fixed conveyancing fee.

Step 7 All the home owners must accept the offer to buy in writing. Failure to do this may mean that your application will not progress.

Step 8 We will appoint a Solicitor or Conveyancer to act for us.

Step 9 The paperwork in connection with the Stair-casing is prepared by our Conveyancer and approved by your Solicitor or Conveyancer

Step 10 Complete the Stair-casing. The fact you have bought more shares is recorded in a formal document called a Memorandum of Stair-casing. This is signed by you and Howard Cottage.

If you own a flat and you Staircase to 100% your lease may be amended (varied) to record the fact it is no longer a Shared Ownership Lease or you may take a transfer of the lease owned by us and your shared ownership lease comes to an end.

If you own a house and you Staircase to 100%, the Freehold of your home may be transferred to you, usually on the terms set out in your Shared Ownership Lease.

Step 11 Your Conveyancer will register the legal documents relating to your purchase of additional shares as evidence of your entitlement to the additional shares.

How much will I pay for extra shares?

The shares will be sold at the current market value, disregarding any improvements to your home that we have consented to. The assessment of the current market value will be made by a Royal Institute of Chartered Surveyors (RICS) qualified valuer, by way of an open market valuation of your property.

Which valuer can I use?

You can instruct your own valuer or once we receive your request, we will instruct one of our panel surveyors within five working days. They will contact you by phone or email to confirm the instruction and arrange a suitable appointment to visit you and carry out the valuation. Subject to your availability, the visit should be within 5 working days of them receiving our instruction. At this time, they will also collect their fee (normally by a credit/debit card payment over the phone)

How long is the valuation valid for?

The valuation is valid for three months. If completion has not occurred within three months, then either a revaluation or an extension will be required. Your valuer may charge for this.

What happens if I am not happy with the valuation figure?

If you dispute the valuation you are able to challenge this by providing written reason for your concerns directly with your valuer. You should provide evidence of the sale prices of at least three similar properties in your area. You may then request that your valuer reconsiders their opinion. If you are still not satisfied with the outcome you may instruct another RICS qualified valuer to revalue the property at your expense. We will not be involved in this process and should only be forwarded the report once you are happy to proceed.

Please note that an estate agent’s valuation is not acceptable; under the terms of the lease the valuation must be carried out by a RICS qualified surveyor. Whichever valuer you choose you are responsible for their fee.

Why are improvements disregarded?

If you have made improvements to your home, for example, fitted double glazing and we have consented to these improvements, you may ask the valuer to disregard the value the improvements have added to the open market value of your home. The improvements are disregarded because they do not form part of our share.

For example: If your home is valued at £150,000 with the double glazing, but would have been valued at £148,000 if the double glazing had not been fitted, then the value, disregarding the improvements, of £148,000, will be the figure used to work out the value of the extra shares. We will check our files to make sure that the improvements have received our consent.

What do I do once I have the valuation?

Send the valuation to us. We aim to provide you with written confirmation of how much the additional shares will cost within 5 working days.

Once we have confirmed to you the price, you need to let us know if you wish to proceed. You will also need to instruct a solicitor and confirm their details to us. We will also require details of your mortgage lender.

What happens to my specified rent and other charges?

If you have partially stair-cased, the amount of specified rent you pay will be adjusted in accordance with the additional shares you have purchased. Your buildings insurance, ground rent and service charge will remain unchanged. If you have purchased all of the remaining shares in your property you will no longer have to pay specified rent. However, you will continue to be responsible for service charges and ground rent if applicable. If your property is transferring to freehold you will be responsible for arranging your own buildings insurance.

Will my property become freehold when I fully staircase?

This depends on the type of property you have and what is contained on the lease. If you live in a flat, the property will remain leasehold. If you live in a house, it is likely that the freehold interest will transfer to you on completion. Unless we do not own the freehold or your lease does not allow us to transfer the freehold.

How do I start the stair-casing process?

Once you have satisfied yourself that you can afford the extra shares, see Stage 1 at the top of the page. Yu can start the stair-casing process please complete the form below and pay the administration fee by one of the methods listed, checks should be made payable to Howard Cottage Housing Association.

On receipt of the valuation and administration fee, we will confirm to you the amount you will have to pay if you wish to buy extra shares. Our formal offer letter can be provided to your mortgage lender for confirmation of our consent to the stair-casing.

Is there anything else I will have to pay?

You will be responsible for our administration fees, the valuation fee, your solicitor’s fee and (if applicable) your mortgage arrangement and redemption fees.

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