Your lease will tell you if you can buy in 1% shares. We will send all qualifying customers a notice each year reminding you of this and letting you know the value of the 1% share. The notice will be valid for three months and you must complete the purchase in that time.
Do I need to pay for a valuation?
You don’t need to pay for a valuation unless you think the value shown on your notice does not reflect the current value. If you think this may be the case, please contact us first as the valuation you get will need to meet the same standards as any other staircasing.
Do I need to instruct a solicitor?
You don’t need to instruct a solicitor, as there will be no changes to what is registered with the Land Registry and no contract of sale. Once you have paid the additional 1% value shown on the notice or agreed by a valuation, we will issue you with a Memorandum of Staircasing, which you must keep for your records. We will also keep a copy for our records.
Can I only do it once a year when you send me the notice?
No, you can opt to buy an extra 1% at any time in the year, but you will need to ask us for an updated additional percentage value notice first if the one we’ve sent you is more than three months old.
Is there anything else I need to pay if I buy 1% on top of the value of my home?
If you owe us any other payment, such as rent and service charge arrears, you must pay those at the same time as the additional percentage value. We don’t ask for any administration fee for 1% staircasing.
We do reserve the right to arrange a valuation, which may alter the amount of the 1% value on your letter, but this will be only if we think the formula calculation does not reflect the market value of your home. If we decide a valuation is needed, we will pay for it.
The formula to calculate the value uses HPI. What is that?
The formula used is outlined in your shared ownership lease:
1% of the open market valuation from the time you first purchased your home, unless a later open market valuation has been done – the notice will tell you the amount of the valuation and the date it was done – this is known as X
The housing price index figure, for the type of property your home is classed as, within your local authority area, that was published closest to the date of the valuation date – this is known as Y.
The latest housing price index figure available for the type of property your home is classed as, within your local authority area, that was published just prior to your notice being issued (the notice will tell you which month and year has been used) – this is known as Z.
These figures are used to calculate the value using the formula (X multiplied by Z) divided by Y.
For example, if your home was last valued at £200,000 then 1% will be £2,000 and this will be X. If the HPI index figure closest to the date of this valuation was 112.33 and the latest published HPI figure is 124.73 then the calculation will be:
2,000 x 124.73 = 249,460 divided by 112.33 = 2,220.78
Using this example, the cost to buy another 1% now will be £2,220.78.
