Hello everyone, I have been reading this forum for a few months and finally decided to post as I am reaching a point where I need to make a decision.
I bought a shared ownership flat in 2017 on a 125 year lease, so it now has around 116 years remaining. I staircased from 40% to 75% in 2021, and at the time my housing association valued the property at £185,000, so I paid them for the additional 35% share at that valuation. The current estimated value based on recent sales in the block is somewhere around £195,000 to £200,000.
I am now seriously considering staircasing to 100%. My main motivation is that once I own outright, I can apply to acquire the freehold (my housing association has confirmed this is an option for my block under the terms of the lease). At 116 years remaining the lease length is not urgent in itself, but I am conscious that every year I wait the marriage value question gets marginally closer, and I would rather deal with this while the numbers are relatively straightforward.
My questions are as follows. First, has anyone staircased to 100% recently and can give me a rough idea of the costs involved beyond the share purchase itself? I am expecting a RICS valuation fee, solicitor fees, and possibly a Land Registry fee, but I am not sure what else to budget for. Second, once you own 100%, is the process of acquiring the freehold (or a share of it) genuinely straightforward, or does the housing association tend to drag its feet? Third, is there any reason to wait, for example if there are upcoming legislative changes to leasehold that might make this cheaper or easier?
I have looked at the LEASE website and the Homes England guidance but would really value hearing from anyone who has been through this. Any advice appreciated.
@LeaseholdShared99, I have not staircased myself but I own a leasehold flat and have spent the last year dealing with freeholder disputes, so some of this territory is familiar.
On costs, my understanding is that in addition to the RICS valuation (typically £300 to £500 depending on your area) and conveyancing solicitor fees (probably £800 to £1,200 for this type of transaction), you may also need to pay the housing association’s legal costs. That last one catches people out. Check your lease, as some shared ownership leases require you to cover the HA’s reasonable legal fees on staircasing, which can add another £500 or so.
On your third question about legislative changes, the Leasehold and Freehold Reform Act received Royal Assent in 2024 but most of the key provisions have not yet been commenced. There is talk of abolishing marriage value for lease extensions, which would not directly affect your staircasing but could affect the subsequent freehold purchase cost. I would not wait indefinitely on the basis of legislation that has no confirmed commencement date, but it is worth being aware of.
@Clara_Obscura, thank you, that is really helpful context. The freeholder dispute angle is one I had not fully considered. In my case the housing association is actually still the freeholder, which I believe is fairly common with shared ownership built before 2010 or so.
I have had an initial RICS valuation done and the surveyor has put the remaining 25% share at approximately £52,000, which is based on the current open market value of the whole property being around £208,000. That feels about right for a two bedroom flat in this part of the West Midlands.
What I am less clear on is whether the housing association can impose conditions on a freehold purchase once I have staircased to 100%. I have read that some associations retain the freehold even after full staircasing and simply convert the lease to a long lease, which would leave me in essentially the same position as any other leaseholder. Does anyone know if there is a standard approach here, or does it vary by association?
A quick update on this. I received the independent valuation from the housing association’s surveyor last week. They have valued the remaining 25% share at £52,000, which puts the full market value of the flat at £208,000. I had a local agent round informally who suggested £195,000 to £200,000 would be more realistic in the current market, so there is a gap of at least £8,000 to £13,000 depending on which figure you trust.
I understand I can challenge the valuation by commissioning my own RICS surveyor, but that is another £300 to £500 and there is no guarantee it results in a lower figure. Has anyone here successfully challenged a staircasing valuation and got it reduced? I am also wondering whether it is worth waiting six months to see if the market softens slightly, given the Nationwide data showing only 1% annual growth, but then my lease is ticking down the whole time.
Any thoughts appreciated. I will look into the LEASE advisory service as @Clara_Obscura mentioned.