Shared ownership in brief

Shared ownership is a UK scheme in which you buy a share of a home, usually with a mortgage, and pay rent to a housing provider on the remaining share. You typically pay the full service charge and maintenance costs regardless of your share. Staircasing lets you increase your share over time, up to full ownership where the lease allows.

How the process works

1. Check your lease. It sets the minimum share you can buy at each step and any limit on the maximum share.
2. Contact your housing provider. They explain their process and any forms.
3. Get a valuation. An independent surveyor, usually RICS-registered and acceptable to the provider, values the home at current market value.
4. Arrange funding. Increase your mortgage, remortgage, or use savings.
5. Instruct a solicitor. They handle the legal transfer and lease changes.
6. Complete. You pay for the new share, and your rent reduces to reflect the smaller share you do not own.

How the price is set

The price of an additional share is a percentage of the property's current market value. If the property has risen in value since you bought, each percentage point costs more than it did originally; if it has fallen, it costs less. The valuation is typically valid for a limited time, so plan funding and legal work to complete within that window.

Improvements you have made may be considered in the valuation process depending on the provider's policy; ask before the valuation.

Minimum shares and newer leases

Older shared ownership leases often require staircasing in larger steps, for example at least 10 percent at a time. Newer model leases introduced in England in recent years allow smaller increments, including buying 1 percent at a time for a period after purchase, with a simplified pricing process for those small steps. Some homes, particularly in certain rural areas, limit the maximum share below 100 percent. Your lease is the definitive source.

Costs to plan for

• Valuation fee.
• Solicitor's fees.
• Mortgage arrangement or broker fees if borrowing more.
• Stamp duty land tax may be payable when staircasing past certain thresholds, depending on how stamp duty was handled when you first bought.
• Provider administration fees in some cases.

Add these to the share price when deciding whether a step makes financial sense.

Is staircasing worth it?

Compare the total cost of buying an additional share, including fees, with the rent saved and any change in mortgage payments. If property values have risen strongly, each share costs more, but you also gain a larger stake in a more valuable home. If values have fallen, staircasing can be cheaper per share. Consider your plans: if you expect to move soon, the transaction costs of a small staircasing step may outweigh the benefit.

Selling a shared ownership home

If you sell before owning 100 percent, the housing provider usually has a period to find a buyer through its own process before you can sell on the open market, and the buyer must meet eligibility criteria. Once you own the whole home, these restrictions typically fall away, which can make selling simpler and widen the pool of buyers.

Reaching full ownership

When you staircase to 100 percent of a house, the freehold is often transferred to you, depending on the lease. For flats, you usually own the full leasehold and continue paying service charges and ground rent to the freeholder or management company. Once you own the whole property, you can usually sell on the open market without the provider's nomination rights that apply to partial shares.

This page is general information about how staircasing works, not legal, mortgage, or financial advice. Lease terms and provider rules vary, so check your own lease and take advice on your situation.