In most cases, you can buy a shared ownership property outright. The process is called staircasing, and it involves purchasing additional shares in your property over time until you reach 100% ownership. At that point, you stop paying rent to the housing association and own the property outright.
However, it’s not quite as simple as it sounds. Not all shared ownership properties allow you to staircase to 100%, the costs involved at each stage can be significant, and the process requires careful planning. This guide explains exactly how it works, how much it costs, and what to watch out for before you commit.
How does shared ownership work?
Shared ownership is a government-backed scheme that allows buyers to purchase a share of a property, typically between 10% and 75%, and pay rent to a housing association on the remaining share. You take out a mortgage on the share you’re buying, and your deposit is calculated as a percentage of that share rather than the full property value.
For example, if you’re buying a 40% share of a £300,000 property:
- Your share is worth £120,000
- A 10% deposit on your share would be £12,000 (not £30,000)
- You’d take out a mortgage for £108,000
- You’d pay rent to the housing association on the remaining 60% (£180,000)
The rent is usually set at around 2.75% of the unsold share per year, so in this example that would be approximately £412 per month, on top of your mortgage payment.
What is staircasing?
Staircasing is the process of buying additional shares in your shared ownership property over time, which reduces the rent you pay and moves you closer to full ownership.
Under the current shared ownership model introduced in 2021, you can staircase in increments as small as 1% per year for the first 15 years, which makes it more affordable to increase your share gradually. Under older shared ownership leases, the minimum increment was typically 10%, which meant larger lump sums were needed each time.
Each time you staircase, you’ll need to:
- Get a new RICS valuation of the property (typically £300–£500)
- Pay your solicitor’s legal fees (typically £500–£1,500)
- Potentially remortgage if you’re borrowing more to fund the purchase
- Pay Stamp Duty Land Tax if applicable
Can you always staircase to 100%?
Most shared ownership properties allow full staircasing to 100%, but not all. There are two situations where you might be capped below full ownership:
Rural Exception Sites
Some shared ownership properties in rural areas are built on Rural Exception Sites, which is land that wouldn’t normally receive planning permission for open-market housing. On these sites, staircasing is often capped at 80%, meaning you can never own the property outright. This is written into the lease, so it’s essential to check the terms before you buy.
Older leases with specific restrictions
A small number of older shared ownership leases contain restrictions that prevent full staircasing. This is rare but does exist. Always ask your solicitor to check the lease terms specifically for any cap on staircasing before you exchange contracts.
How to buy your shared ownership property outright: step by step
Step 1: Check your lease
Before anything else, confirm with your housing association that your property allows staircasing to 100% and check whether your lease is under the 2021 model (1% increments) or an older model (typically 10% minimum). This affects how you’ll plan your staircasing strategy.
Step 2: Get a RICS valuation
The price you pay for additional shares is based on the current open market value of the whole property, not the price you originally paid. You’ll need a RICS-registered surveyor to carry out an independent valuation. The housing association will usually provide a list of approved valuers.
This is important: if property prices in your area have risen significantly since you bought, the cost of buying additional shares will be higher than you might expect based on your original purchase price.
Step 3: Speak to a mortgage broker
If you’re buying a significant chunk of shares, you may need to remortgage to release funds. A specialist shared ownership mortgage broker can advise on the best way to structure this, whether that’s increasing your existing mortgage, taking out a new product, or using savings if you have them available.
Step 4: Instruct a solicitor
You’ll need a solicitor experienced in shared ownership to handle the legal transfer of shares. Shared ownership leases are complex and this is not a standard conveyancing transaction, so you need someone who knows them well. Your housing association may have a panel of approved solicitors, though you’re not obligated to use them.
Step 5: Complete and update your mortgage
Once the legal work is complete, the shares are transferred to you, your rent reduces (or stops entirely if you reach 100%), and your mortgage is updated to reflect the new borrowing if you increased it.
What does it cost to buy your shared ownership property outright?
Aside from the cost of the shares themselves (based on market valuation), you’ll need to budget for the following at each staircasing transaction:
- RICS valuation: £300–£500
- Solicitor’s fees: £500–£1,500 depending on complexity
- Mortgage arrangement fees if remortgaging: £0–£1,999 depending on the product
- Stamp Duty Land Tax: may apply depending on the value and your circumstances (see below)
Stamp Duty on shared ownership staircasing
Stamp Duty on shared ownership is one of the more complicated areas. When you first buy a shared ownership property, you have two options: pay Stamp Duty on the full market value upfront (known as making a ‘market value election’), or pay only on the share you’re buying and then pay again when you staircase above 80%.
Making the market value election upfront can actually save money in the long run if you plan to staircase to 100%, because any future staircasing transactions won’t incur additional Stamp Duty. However, it requires paying more upfront at a point when cash is typically tight. This is something to discuss with your solicitor at the point of purchase.
When does it make sense to buy outright in one go?
In some circumstances, it’s possible to buy a larger initial share, or even 100%, of a shared ownership property from the outset rather than staircasing gradually. This is sometimes referred to as ‘full market purchase’ and may be available on some new-build schemes.
Whether this is possible will depend on the housing association and the specific development. If you have enough deposit and borrowing capacity to purchase a full share, it removes the complexity of future staircasing and the ongoing rent payments. However, it also means you won’t benefit from the lower initial deposit that makes shared ownership attractive in the first place.
Is shared ownership worth it if you want to own outright eventually?
This depends significantly on what happens to property prices in your area. If prices rise quickly, the cost of staircasing becomes more expensive over time, and you could end up paying substantially more for the later shares than if you’d been able to purchase outright from the start.
On the other hand, if shared ownership allows you to get onto the property ladder in an area where you couldn’t otherwise afford to buy, you benefit from property price growth on the full value of the property, not just the share you own, which can significantly improve your financial position over time.
The maths works out differently for everyone depending on local house prices, rental costs compared to open-market renting, and how quickly you’re able to staircase. It’s worth modelling the numbers with an adviser before committing.
Who is eligible for shared ownership?
To be eligible for shared ownership, you generally need to meet all of the following:
- Your household income is £80,000 or less per year (or £90,000 or less in London)
- You are a first-time buyer, or you used to own a home but can’t currently afford to buy one
- You pass the housing association’s affordability assessment
- You have sufficient deposit (typically 5–10% of the share you’re buying)
Some shared ownership schemes also give priority to people with a local connection to the area, or to people currently in social housing. Check with the housing association for the specific eligibility criteria on any development you’re interested in.
What happens when you reach 100% ownership?
When you complete your final staircasing transaction and reach 100% ownership:
- Your rent payments to the housing association stop entirely
- You own the property outright (subject to the terms of the lease)
- Your mortgage covers the full property value
- The property can generally be sold on the open market like any other leasehold property
One important note: shared ownership properties are almost always leasehold, not freehold. Even at 100% ownership, you’ll still be bound by the terms of the lease, which may include service charges, ground rent (though new leases are increasingly zero ground rent), and restrictions on what you can do with the property. Make sure you understand the lease terms fully before purchasing.
Get expert shared ownership mortgage advice
Whether you’re buying your first share or looking to staircase to full ownership, getting the mortgage structure right makes a significant difference to the overall cost. At Mortgage Saving Experts, we specialise all types of mortgages and can advise on the most cost-effective route to full ownership based on your specific circumstances.
We’re a whole-of-market broker with access to lenders not available on the high street, and we’ll give you clear, straightforward advice including an honest view of whether shared ownership is the right route for you. Get in touch today for a no-obligation conversation.
Frequently asked questions about shared ownership mortgages
Can I sell my shared ownership property before I reach 100%?
Yes. Most housing associations have a ‘nomination period’ (typically 8 weeks) during which they can find another eligible shared ownership buyer. If they can’t find a buyer, you’re usually free to sell on the open market, but the buyer would be purchasing the same shared ownership arrangement rather than buying the full property.
What if I want to sell the whole property, not just my share?
If you want to sell the whole property on the open market, you’ll either need to staircase to 100% first, or the housing association may agree to what’s called a ‘back to back’ transaction where the final staircase and the open market sale happen simultaneously. This is more complex legally and not all housing associations will agree to it.
Can I sublet a shared ownership property?
In most cases, subletting a shared ownership property is not permitted until you reach 100% ownership. This is a significant restriction if your circumstances change, for example if you need to move for work. Always check the lease terms carefully.
What if the housing association won’t agree to me staircasing?
The housing association cannot unreasonably refuse a staircasing request, as your right to staircase is set out in your lease. If you’re encountering difficulties, speak to a solicitor who specialises in shared ownership.
