Staircasing

The New Model for Shared Ownership lease has some great new additions:

• You can now purchase shares from just 10% (subject to availability).
• A new gradual staircasing process has been introduced allowing you to purchase an additional 1% each year for a maximum of 15 years.
• You can purchase further shares from as little as 5% each time (known as staircasing).
• The introduction of a new 10-year period during which emh will support you with the cost of repairs and maintenance in your new build home (see section on repairs).
• The resale nominations period has been reduced from 8 weeks to 4 weeks.
• All new leases on New Model for Shared Ownership homes will have a minimum lease length term of 990 years.

Staircasing | How does it work?

Under the New Model for Shared Ownership, you can purchase further shares in your property at any time. In most cases you can purchase up to 100% of the equity in the property, thereby becoming the outright owner. This is a process known as ‘staircasing’.

The staircasing process will enable you to purchase 5% or more at the prevailing market value as assessed by an independent RICS registered surveyor.

Please ask us for further details.

Gradual Staircasing

In addition to being able to staircase in 5% or greater amounts, you will have the option to buy 1% each year with heavily reduced fees. The price of each 1% share will be based on an estimated valuation linked to the original purchase price, adjusted each year upwards or downwards in line with local House Price Inflation.

Key details are as follows:

Property eligibility

• Gradual 1% staircasing will be applied to new Shared Ownership homes and homes where a resident has accessed Shared Ownership through the Right to Shared Ownership.
• The gradual staircasing offer will be available for a minimum of 15 years.
• You will not be able to roll over or accumulate the gradual staircasing offer to purchase in future years – it is limited to max of 1% each year.
• A full 15-year term of 1% gradual staircasing will be available on all new model for shared ownership homes.
• A new 15 year term will be offered to the new shared owner when a new model for shared ownership home is resold (known as a resale).

Valuation

• We will use the original RICS valuation (i.e. the original purchase price of the home) as the baseline valuation. Each year, we will use the latest available House Price Index (HPI) data for the appropriate local authority and property type (published by HMLR) to adjust the valuation upwards or downwards and produce an up to date valuation for anyone who wishes to purchase an additional 1% of their home via gradual staircasing.
• We will provide you with this updated valuation (for the purposes of 1% gradual staircasing only) at least once per year, and at any other point that you request to purchase an additional 1%.
• HPI valuations will be valid for a maximum of 3 months at which point we will produce an up to date valuation using latest available data. This is in line with the current valuations process.
• There will be no right to appeal an estimated valuation. If you are unhappy then you can opt to use a RICS valuation – this will be at your own cost.
• We will also have the right to use a RICS valuation where we have significant concerns about the accuracy of a HPI valuation. This will be at our cost. This cost will not be passed on to you.
• Where a RICS valuation is used (as above) or at any point you staircase in larger amounts (5% or more with a RICS valuation) this new valuation will become the base valuation, adjusted upwards or downwards using local HPI data for the remaining years.
• We will not charge a fee for producing a HPI estimated valuation.
• We will not charge any other administrative fees on the gradual staircasing model.
• You will remain responsible for your own legal fees if you choose to get legal advice/representation, as will we.
• If you are looking to gradual staircase, then we will require you to seek legal advice, as it is a legal transaction.

Please ask us for further details.