Sentinel Shared owners guide to staircasing

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1 Sentinel Shared owners guide to staircasing How to buy further shares in your home Making a difference

2 What s staircasing? Once you ve completed your purchase you can buy more shares in your home. This is called staircasing and means you can own a bigger proportion of it. Do I have to buy more shares? You don t have to it s entirely up to you. Most shared owners staircase to reduce the rent they re paying. The more shares you buy the less rent you pay to us. And as you ll own a greater percentage you ll make more profit, if you sell your home and the value s gone up.* How do I staircase? If you want to buy more shares, you need to let us know in writing. You can read more about this in your owner s handbook. To find out what your home is worth, a surveyor will need to value it. We can arrange this for you or you can get your own valuer to give you a quote. Your lease explains that you re responsible for the cost of the valuation and that it must be carried out by a surveyor who s a member of the Royal Institute of Chartered Surveyors (RICS). An estate agent s valuation isn t acceptable. Your valuation will be valid for three months. So you must complete the transaction in this time or you ll need to get your home re-valued. You can normally get your valuation updated at a reduced fee, as the surveyor won t have to visit your home again. But if the value s increased, the share you re buying will cost more. From the date of completion your monthly rent will be lower. But, if you ve taken out a mortgage for the share, the amount you pay to your lender will be higher. * Remember the value of your home can go down as well as up.

3 How many times can I staircase? You can usually staircase up to three times. The amount you can buy depends on the terms of your lease. The minimum share you can buy is usually 10%. The maximum is normally 100%, but some leases restrict this to 80%. Check with us before you start.

4 Who else needs to be involved? Mortgage lender: if you re increasing your mortgage to buy more shares, you ll need to contact your lender direct to organise the additional amount. This is known as a further advance. Independent Financial Advisor: If you want to move your mortgage to a new lender, perhaps because of a better interest rate, this is known as re-mortgaging. We can give you details of IFAs who know about shared ownership and the lenders you can apply to. Solicitor: increasing the share you own of your home will involve changes to your existing lease. So you ll need to arrange a solicitor. Again we can give you details of solicitors who know about staircasing. Or you can use the same solicitor who dealt with your initial purchase. What are the costs involved? When you buy more shares in your home you ll have to pay: valuation fees legal fees mortgage arrangement fees stamp duty (if applicable). There may also be further costs, charged by your mortgage lender. Make sure you ve saved enough to cover these. Do I benefit from any improvements that I have made to the property? If your improvements have added value to your home (and not all improvements do) they won t be included in your valuation. So this means you won t have to pay more for your additional share if the value of your home has increased due to work you ve done.

5 What happens if I staircase to 100%? Once you own 100% of your home you won t pay us rent anymore. If you own a flat you ll still be a leaseholder, so you ll still have to pay your service and management charges. If you own a house, the freehold of your home can be transferred to you. You ll need to ask us to do this for you. There s no charge for this transfer, but you ll have to pay your own legal costs. Once this has happened, you won t be charged for buildings insurance. In some cases you may still have to pay us a service charge - e.g. if you live on an estate and have to contribute to communal costs. Whether you live in a flat or a house, after three months of staircasing to 100% you can sell your home on the open market or sub-let it on approved terms.

6 Is there any reason why I wouldn t be able to staircase? You can t buy further shares if you re behind with your service charge or rent payments. Some homes have a restriction on staircasing. If this affects yours there ll be a limit on what you re able to staircase up to. Details of any restrictions can be found in your lease or you can ask us to check for you. Example for a property valued at 160,000: Share owned 50% 70% 100% Typical monthly rent How do I find out more? Call us on or leasehold@sentinelha.org.uk.

7 Staircasing valuation request Please complete this form and return to us, or your valuer, with your cheque for 180 made payable to Sentinel Housing Association. Name(s): Address: Home phone: Mobile: Postcode: I/we would like to buy: more shares % all remaining shares % Improvements give details of any structural improvements you ve made to your home that you think affect its value (RICS valuer s decision is final) Signed Signed Date Date Please return this form (together with your report if you ve arranged your own valuation) to the Leasehold Services Team at: Sentinel Housing Association, 56 Kingsclere Road, Basingstoke, Hampshire, RG21 6XG

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