By Clare Lewis, a Licensed Conveyancer with GHP Legal

If I buy out housing association shares, will I still have to pay ground rent?

Q: I bought a house through a shared ownership scheme. Now my boyfriend has moved in with me my financial situation has changed, and together we could be in a position to purchase more shares and eventually own the house lock, stock and barrel. If we own the house 100%, will we still have to pay ground rent and service charges?

A: Buying further shares in a home that is part owned by a housing association is called ‘staircasing’. The more shares you own, the less rent you will pay to the housing association, but you will still have to pay ground rent and service charges unless you own the freehold. You should therefore contact the housing association and ask whether you can purchase the freehold when you make the final payment to own 100% of the property.

Prior to 2022, shared owners were typically only allowed to staircase a maximum of three times. Since then, many housing associations have ceased to restrict the number of times further shares could be purchased. As staircasing rules vary from provider to provider, you should check the terms of your lease to see how often you can increase your holding. It is, however, worth bearing in mind that every time you staircase you will be charged an admin fee, so buying additional shares in larger chunks is more financially viable. Depending on how much you paid when you purchased the property, you may also be liable for stamp duty.

Looking further ahead, if you want to sell your property and don’t own 100% of it, you will need to inform your provider and organize and pay for an RICS valuation of the property. In some cases you must offer the property to the provider first, before putting it on the open market. Even if you own 100%, if the property is still leasehold because you have not purchased the freehold, you may still have to offer it back to the housing association first.

This question has been answered by Clare Lewis, a Licensed Conveyancer with GHP Legal. If you would like to speak to someone about this or any other legal matter, please visit our website and use the contact us form, or call us on: Wrexham 01978 291456, Llangollen 01978 860313, Oswestry 01691 659194