Origin STAIRCASING Booklet v5:Layout 1 - Pelorous

What is Staircasing?Usually once you have lived in your home forthree months, you can buy further shares inyour property. This process is known asstaircasing, enabling you to own a greaterproportion of your home. If you boughta resale property you can buy further sharesafter only three months. The greater theshare you buy in your home the less rentyou will pay to Origin Housing. If youstaircase to 100% you become an outrightowner, and pay no rent!Staircasing is limited to those whohave purchased their home through aShared Ownership product.The Homes & Communities Agency –the governing body for registered providersrequire that leaseholders may acquireadditional shares in their property at a priceequal to the relevant proportion of the currentfull open market value of their property.You don’t have to staircase – it is entirely upto you, however having requested this guidewe assume you are considering buying agreater share of your home and naturallyyou want to find out more about staircasing.There are no restrictions in the majority ofcases however we would recommend inthe first instance that you refer to yourlease. This may require assistance fromyour legal representative.1

What are thebenefits of staircasing?Most people aspire to own their ownproperty and you made the step towards thiswhen you bought your Shared Ownershiphome on a part buy/part rent basis.Buying a greater proportion of your homehas a number of benefits:• You reduce the amount of rent you arepaying to Origin Housing.• When you decide to sell your home, thegreater percentage you own, the moreprofit you will make if the value of yourhome has increased.• If you own your property outright (become100% owner) you can sell your property onthe open market using an estate agent ofyour choice.• If you staircase and own your propertyoutright, you can sell your home to anyoneinterested in buying your home and not berestricted to those registered and approvedby the Homebuy Agent who meet thecriteria within the lease.• Becoming the outright owner allowsyou to maximise the profit from any majorhome improvements. Once you own 100%you will get back the full profit for thecurrent market value when you come tosell your home.3

General informationIs there any reason whyI would not be able tostaircase?As a responsible Registered Provider,Origin Housing may in certain circumstancenot allow a leaseholder to buy further sharesin their property.We do not allow staircasing:• if you have arrears with your service chargeand/or rent• if your income doesn’t meet our guidelinesfor responsible lending and the increasedshare is not affordable for you. This willbe after assessing your current financialsituation with our Financial Advisors at theFinancial Interview• if your property has restrictions onstaircasing. Some of our properties haverestrictions on staircasing, if this appliesyou will be limited to what you are able tostaircase up to. Details of any restrictionscan be found in your lease• if your request to staircase is notsigned by all those who originallybought the property.What if I have made HomeImprovements to my home?When you have your home valued forstaircasing, the value is based on the currentmarket value of your home which will includethe home improvements you may have done.If appropriate, the valuer will show twofigures, the £mv and the additional valueassessed to be due to the pre-agreedimprovements you have made.General home maintenance, repairsand redecoration are not regarded asimprovements and generally will notincrease the value of your home.Improvements such as double-glazing,new fitted kitchen/bathroom, installingcentral heating, loft conversions andconservatories are considered and mayincrease the value of your home but notalways by as much as you originally paidfor the work.Please remember that you need to requestpermission and written approval from ourHome Ownership team before carrying outany major improvements to your home. Youwill have had to provide us with estimates,quotations and maybe plans and localauthority planning approval for the permissionto be granted. Our surveyor may have alsovisited your home. You will need to providethese documents if you wish major homeimprovements to be disregarded from yourstaircasing offer.4

What are the costs involved instaircasing?Every time you staircase you will haveexpenses to pay therefore before decidingto staircase it is worth investigating the fullcosts involved and consider carefully theadditional share you wish to buy.Some of the expenses you willhave to pay are:The valuation fee – required by OriginHousing in accordance with your lease andthe HCA guidelines. We have negotiated verycompetitive fees with our panel of RICSqualified valuers to determine the currentopen market value of your home. Their feesrange from £150 - £350 substantially less thanmany other valuers. You may select anothervaluer not on our lists providing they are RICSqualified. We will instruct them on yourbehalf and receive a valuation report. Thevaluation fee must always be sent toour Sales and Marketing team.Legal expenses – Staircasing will involvechanges to your existing lease which willrequire the professional services of a solicitor.The solicitor will have disbursements andprofessional fees for acting for you.Stamp Duty – In certain circumstances youmay need to pay stamp duty. This will need tobe discussed with your legal representative.Mortgage fees – If you are applying to changelenders (re-mortgage) to buy the additionalshare, or to obtain a better interest rate youwill be required to pay the lender’s valuationfee and you may be required to pay amortgage arrangement fee. You may also haveto pay penalty charges to your existing lenderif you re-mortgage before the end of theproduct end date. You must investigate thiswith your lender or financial advisor prior toapplying to staircase.Rent and Service Charge arrears –If you have any arrears these must be clearedbefore completion of the staircasing transaction.NOTE: The valuation fee is for a valuationreport valid for a three month period.If your staircasing transaction does notcomplete within this period you will berequired to pay an additional valuation fee.We will require this new report and if theprice has changed an amended offer will beissued which could result in additional costsfrom your lender and solicitor.5

On receipt of the completed form andvaluation cheque the valuer will be instructedto arrange an appointment with you tovalue your home. To ensure this is dealtwith promptly please provide contact detailsand be as flexible as possible to ensurethe valuer can deal with our instructionin an effective and timely manner.After viewing your home, the valuer willresearch your area and produce their valuationreport with comparables of similar propertiesin your area which have been sold or are beingmarketed. This report will be sent to the Salesand Marketing Team who will check the detailsand issue an offer letter to you along with acopy of your valuation report.We send you the offerWhen you applied to staircase you would haveindicated the additional share in the propertyyou were considering. Based on this and thevaluation we will issue an offer to you whichyou must accept or decline.Don’t forget the valuer’s report is only valid for3 months and therefore you must act quicklyto complete the staircasing transaction beforethe valuation report expires. If the transactiondoesn’t complete by this date you will incuradditional costs for a new valuation and yoursolicitor may charge additional charges as wewill make you a new offer based on the currentvaluation. This valuation could be lower orhigher than the original valuation dependentupon the housing market at the time.If the valuation is disputed, a valuationwill be carried out by the District Valuationoffice at a charge to you. The District Valuer’sopinion is to be accepted as the final wordon valuation disputes.Financial Assessment InterviewWhen you originally purchased your SharedOwnership home you most probably had afinancial assessment interview with one of ourIndependent Financial Advisers (IFA’s). From thetime you originally bought your home to nowwhen you are considering buying more equityin your home, your personal circumstancesmay have changed considerably. As aresponsible Registered Provider, we require youto have another financial interview to ensureyou meet our affordability requirements andthat the additional share being purchased isnot likelyto cause you financial difficulties in the future.You must attend this interview otherwisewe may not offer you the opportunityto staircase.So that we can help you buy further sharesas quickly as possible, you must supply thefollowing documents:• your payslips for the last 3 months.(Please supply 3 months’ worth evenif you are paid weekly) or• if you are self-employed, your auditedaccounts for the last two years from acertified accountant or last 2 years’ taxassessments from the Inland Revenue.• your latest P60• your passport• last 3 months bank statements.If you have bought your home with anotherperson and you are buying further sharesin joint names, both must supply the abovedocuments to the financial advisor.7

The maximum additional share you canbuy will be confirmed by the IFA at thefinancial interview and will need to complywith the requirements of the lease.After the financial interviewThe IFA will be able to assist you with yourmortgage arrangements to buy the additionalshare – if you want them to. If you want toarrange your own mortgage, you should talkto some banks and building societies andmake sure that you tell them you are buyingadditional shares in your Shared Ownershiphome. You must act quickly and must stressto your lender and solicitor that thestaircasing valuation offer is only valid for3 months and therefore it is imperativethey act quickly to achieve this completiondeadline to avoid additional costs for you.Three months seems a long time butpasses quickly and you certainly don’tneed an additional valuation fee to paywhich potentially could mean a new offeras the housing market can rise or fall withina three month period.Once you have the mortgage offer, contactyour solicitor to arrange to complete thestaircasing transaction. They may need toarrange an appointment to go through thelegal paperwork with you. Once this has beencompleted, your solicitor will advise us ofthe date you intend to complete thestaircasing transaction. We will then sendout a completion statement which willconfirm the increased share in the propertyyou will own along with the new rentpayments if you are not staircasing to100% ownership. We will also advise if GroundRent is applicable (you can check this in yourlease when you own 100%).Finally – staircase completiondate arrivesCongratulations - You will now own eithera greater share or the full 100% value ofyour home.We will adjust your account in line with theincreased share you own in your home andto allow for any net credits owed to you,send confirmation of your new chargesand/or close your account if your staircasingtransaction requires us to do so. If you owna Do It Yourself Shared Ownership (DIYSO)property then this will be the lastcorrespondence you will receive from us.If you become the 100% owner of a houseusually the Freehold will be transferred toyou after completion. You will no longer becovered under our block buildings InsurancePolicy from the date your staircasingtransaction completed. You must ensure thatyou have a building Insurance policy in place atcompletion. If however you become a 100%owner of an apartment you will still be coveredunder our block buildings insurance policy.If Origin is not the owner of the freeholdof your apartment, you may have yourShared Ownership lease changed to thehead lease from the freeholder and have nomore connection with Origin. You will paycharges direct to the freeholder or theirManaging Agent.8

What happens when I becomethe outright owner (own the property 100%)?Once you have staircased to 100% youwill no longer pay Origin Housing any rent.However, if you are the leaseholder of anapartment, you are still required to pay yourservice charge and management chargesincluding the ground rent to us or theFreeholder/Managing Agent if not Origin,as we remain the freeholder of theapartment block.If you own a house, the freehold of yourhome can be transferred to you whenyou have staircased to 100%. You willneed to serve notice to Origin Housingrequesting the freehold of the property betransferred to you. There is no charge forthis transfer, however you will have to payyour legal costs. Once this has taken place,you will no longer be charged for buildingsinsurance. In some cases you may stillhave to pay a service charge or estatemanagement charge to Origin Housing if youlive on an estate and are responsible for someof the communal costs.Regardless of whether you live in anapartment or a house, once you havestaircased to 100%, you are free to sellthe property on the open market, usuallywith the professional services of anestate agent.Please note that your lease restricts youfrom selling your property for three monthsfollowing final staircasing.9

Stages to staircasingContact Sales and Marketing to requestapplication to staircaseOrigin Housing confirms your new rent andservice charge paymentSearch for a solicitor to act for youSpeak with your lender and /or financialadvisor about purchasing a further sharein your home to ensure you can obtainadditional funds and the costs involvedComplete the staircasing application form,selecting the surveyor and sending thevaluation fee to theSales and Marketing TeamOrigin Housing instruct the surveyor(RICS or ISVA qualified) to obtaina current open marketvalue of your homeYour valuation fee is bankedThe valuer send Origin Housing2 copies of the valuation reporton your home with comparables(This is valid for 3 months)You complete the staircasing transactionbefore the 3 month expiry of your valuation.(Failure to achieve the 3 month deadlinewill result in you having to pay for a newsurvey and the application process willhave to start again)Origin Housing issue the completionstatement which breaks down thestaircasing transaction and confirms rentand service charges applicableafter completionYour solicitor completes the legalwork and sets the completion datewith our solicitorsYour mortgage offer is issued. Send a copy toyour solicitor to forward to Origin Housing’ssolicitor for approvalOrigin Housing instruct our solicitors to send thelegal packs to your solicitorReturn the Staircasing Authorisationform to Origin HousingWe check the valuation report andsend a copy with the offer letter toyou with an Authorisation Form(subject to a financial interview).The Authorisation Form must bereturned to us before we can proceedFinancial Interview undertaken by ourFinancial Advisor to ensure affordableContact your financial advisor orlender and apply for your mortgageInstruct your solicitorYou check the offer and complete theStaircasing Authorisation Form whichrequires the name and address ofyour solicitor, financial advisor andmortgage provider10

Our EqualOpportunities PolicyThis is what we will do:• provide and promote equal opportunities,whatever a person’s race, colour, ethnic ornational origin, religion, beliefs, sex, age,sexuality, HIV status, physical or mentaldisability, state of health, appearance,marital status, family circumstances oroffending behaviour• give all staff equality and diversity training• encourage groups and individuals thatare disadvantaged in housing andemployment, to apply for jobs, homesand work contracts• keep a record of the ethnic origin, sex,disability and age of everyone who appliesto us for a home or job• consider equal opportunities when wedecide who serves on our management board• make sure everyone we work with or whoworks for us knows about our policy andkeeps to it. If any of these people havetheir own policy, we will make sure it fitsin with ours• take into account good practice inequal opportunities when we updateour housing and employment policiesand procedures.We are committed to promoting equality and diversity.We think there is real value in having people in our workforcefrom a variety of backgrounds and with a diverse range ofexperiences and abilities. We are dedicated to providingservices to all sections of the community and we expecteveryone who works for us to support us in this.11

Our Service PromiseCommunicating with you• We aim to provide an excellent service forall of our customers• If you’re not happy with any aspect of ourservice, please let us know and we’ll try toput it right. We have a complaints’ formwhich we can send you if you want to putyour complaint in writing• We welcome your comments - good orbad - as a way of letting us know what weare doing right or wrong. This helps usimprove our service to you. Our detailedservice promise is available on request.Our Performance StandardsWe aim to:• answer your telephone calls within20 seconds• reply to your letters within tenworking days• give you a decision on whether yourapplication has been accepted withinfive working days• respond to telephone messages within24 hours. (This is due to the fact our SalesOfficers are often out of the office atviewings and may not be able to answeryour call immediately)We have an equal opportunities policyand do not treat any applicant forShared Ownership less favourablybecause of their race, colour, gender,disability or marital status.Buying your homeWe promise to:• explain the whole process to you clearlybefore you buy your new home;• provide you with a free financial interviewand access to mortgage advisors; and• guide you through every step of buyingyour home.We ask you to:• go to all presentations and appointmentswe have invited you to;• be honest about your financialcircumstances; and• contact us regularly throughoutthe process.Your home is at risk if you fail to keep up payments on any mortgage, rent or other loan securedon it. Please make sure you can afford the repayments before you take out a mortgage.12

For more information call 0800 068 8990sales@originhousing.org.ukwww.originsales.co.uk