Are you curious to know what is staircasing? You have come to the right place as I am going to tell you everything about staircasing in a very simple explanation. Without further discussion let’s begin to know what is staircasing?
Staircasing is a term used in the UK to describe a process where a shared ownership homeowner purchases additional shares in their property, eventually leading to full ownership. Shared ownership is a government scheme designed to help people get on the property ladder who might not be able to afford to buy a home outright. In this blog post, we will explore what staircasing is, how it works, and its benefits.
What Is Staircasing?
Staircasing is the process of purchasing additional shares in a shared ownership property. When someone buys a shared ownership property, they typically purchase a share between 25% and 75% of the property’s value. The remaining share is owned by a housing association or other registered provider, who the buyer pays rent to on the portion they do not own.
Over time, the homeowner may choose to purchase additional shares in the property, eventually leading to full ownership. This process is known as staircasing because the homeowner is gradually climbing the property ladder.
How Does Staircasing Work?
Staircasing is a straightforward process. When a homeowner decides they want to purchase additional shares in their property, they can contact their housing association or registered provider to get started.
The homeowner will need to have their property valued by a qualified surveyor to determine its current market value. They will then be able to purchase additional shares in their property based on the new valuation. The cost of the additional shares will depend on the property’s current market value at the time of purchase.
Once the homeowner has purchased additional shares, their rent payment to the housing association or registered provider will be reduced proportionally to reflect their increased ownership of the property.
What Are The Benefits Of Staircasing?
There are several benefits to staircasing, including:
- Increased ownership – Staircasing allows homeowners to gradually increase their ownership of their property over time, eventually leading to full ownership.
- Reduced rent payments – As homeowners purchase additional shares in their property, their rent payments to the housing association or registered provider will be reduced proportionally.
- Increased equity – As homeowners purchase additional shares, they are building equity in their property, which can be used for future purchases or investments.
- Greater flexibility – Full ownership of a property provides greater flexibility for homeowners to make changes to their home or sell it if they choose to do so.
Staircasing is a simple and effective way for shared ownership homeowners to increase their ownership of their property over time. By purchasing additional shares, homeowners can build equity in their property, reduce their rent payments, and eventually achieve full ownership. If you are a shared ownership homeowner and are considering staircasing, be sure to speak with your housing association or registered provider to determine if it is the right option for you.
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What Is An Example Of Staircasing?
For example, if you start by buying 25% of your home and renting the other 75%, you could buy another 25% share. That would mean you own 50%. This process is known as staircasing. It enables you to gradually build up the amount of your shared ownership home that you own.
What Is A Staircasing Process?
Staircasing is the process of buying a greater share of your property in a shared ownership home. After you have staircased to own more of your home, the rent that you pay will decrease as you are only required to pay rent on the share that you don’t own.
Is Staircasing To 100% A Good Idea?
The main benefits of staircasing are that you’ll pay less rent and you benefit more from the property appreciating in value. Once you’ve staircased up to 100% ownership, you also have a better choice of mortgages and are able to sell the property on the open market – as long as your lease allows.
What Does Staircase Mean In Mortgage?
A feature of some Shared Ownership schemes is the option to buy an increased share of your Shared Ownership property and work towards full ownership of your home. This is done by purchasing smaller increments over a period of time, a transactional process known as staircasing.
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