Selling a shared ownership flat – 40% v staircasing to 100%

Jeff wants to know the pros and cons of selling a part share in a shared ownership flat versus simultaneous sale and staircasing

My landlord is allowing me to market my shared ownership flat on the open market through an estate agent (either at the 40% share I own, or at full market value). What are the pros and cons of each?

Zahrah Aullybocus is a Consultant Solicitor with Setfords Solicitors. She says…. There is no ‘best route’ when selling a shared ownership flat – your options will depend partly on what you have to do in order to get the property sold. But it’s important to be aware of the potential cost implications of each route, and to plan accordingly. You mention that:

  • your lease currently has 85 years remaining; and
  • your specified rent is considerably higher than other comparable shared ownership properties on the market (partly due to year on year rent increases of RPI+2% on top of the original 3.5% gross rent at commencement of your lease back in 2006).

I will therefore also explain implications of lease length and specified rent for selling a shared ownership flat. I’ve also included a third option of selling via the housing association for comparison. You haven’t mentioned any EWS1 complications so I’ve assumed this does not apply to your property. Where appropriate, I will mention differences between selling a house and a flat.

Lease Length

The Government has proposed reforms to leasehold extension. But there is currently little certainty on the implications of the reforms for shared owners, when reforms will be enacted, or even if they will be enacted in full.

The 80-Year Threshold

  • Lease extension is currently considerably more expensive once there are fewer than 80 years remaining on a lease. An 85-year lease might deter some buyers (as it would need to be extended in the short term future in order to sell or re-mortgage).  A lease extension would be advisable prior to the 80-year threshold.   Do start considering the cost of the same at 90 years so that you have some time to save/plan your finances to fund the same.

Lease Length and Mortgages

  • Lease length can also have an impact on borrowing and mortgage terms. Different mortgage lenders will have different views on the matter. But, with 85 years remaining, a buyer might have more limited mortgage options from a smaller pool of lenders than would be the case for a property with a longer lease. Which in turn could affect the price buyers are willing to pay for your home.

Valuation and Sales Price

  • If you purchased your home as a new-build, bear in mind that new-builds generally command a premium that will not be reflected when selling a shared ownership flat down the line. Surveyors do not set new-build prices for properties. However, surveyors are responsible for every future valuation. Staircasing and selling valuations both use the same methodology.
  • The market value should represent the value that another individual would pay for a property on the open market.
  • Bear in mind that your housing association’s surveyors may assume a lease does not drop in value until it hits 80 years, whereas estate agents and mortgage lenders may take a different view. This may in turn impact on the achievable selling price.
  • If you accept a sales price that is lower than the surveyor’s valuation, your housing association may require you to pay them the difference between the valuation and the agreed sales price. Talk to your housing association to find out what their policy is in this regard. Make sure you obtain any agreement in writing.

Specified Rent and Staircasing

You mention that the specified rent on your home is considerably higher than other comparable shared ownership properties on the market.

Simultaneous Sale and Staircasing

  • A simultaneous sale and staircasing to 100% transaction would cancel the shared ownership lease (acquisition of freehold in the case of a house, dis-application of shared ownership provisions if a flat) for your buyer.
  • This would get around the problem of payment of specified rent currently being considerably higher than other comparable properties. I discuss simultaneous sale and staircasing to 100% in more detail below.

Option 1 – Selling 40% share via your housing association


  • Most housing associations will already have details of prospective buyers who have registered an interest in buying a shared ownership home, and who meet required eligibility and affordability criteria.
  • The housing association’s assignment fee for finding a buyer may be cheaper than estate agent fees.


  • Any buyer would be required to purchase a share equal to or larger than the 40% share you currently own.
  • New-build sales teams are reportedly more proactive than shared ownership re-sales teams, so it may take a while for your housing association to find a suitable buyer. This may depend partly on the size of your housing association, and their available resources.
  • Housing associations may not provide the full range of services that an estate agent would typically offer. For example, you may be required to provide photographs of your home yourself. Depending on your photography skills, this could also impact on the marketability of your home to potential buyers.
  • You are expected to release keys to your buyer on the day of completion. (Make sure you discuss this with your solicitor).
  • You will probably be in touch directly with your buyer – this may be seen as an advantage, but could also be seen as a disadvantage.  There are many misconceptions which a buyer may have that they could be looking to you to resolve rather than asking through their solicitor. Buyers should really be asking questions via their solicitors.

Option 2 – Selling 40% share via an estate agent


  • Professional services, including photography.
  • Access to a larger pool of potential buyers than available solely via the housing association’s marketing tools.
  • If your estate agent charges on a % commission basis, they will have a vested interest in completing the sale. Arguably more so than the housing association, who benefit from income if you sell, but keep a property asset on their books if you do not.
  • Assistance in with liaising with your housing association, and chasing where required. Your estate agent should also assist with key handover on the date of completion.


  • Any buyer would be required to purchase a share equal to or larger than the 40% share you currently own.
  • As discussed above, you may not be allowed to sell for less than the valuation figure unless you pay over any shortfall to your housing association.
  • Some estate agents are not familiar with shared ownership schemes, and this could cause problems or delays.
  • You may end up paying fees to both the housing association and the estate agent.
  • Potential buyers would need to register via the Help to Buy website, and would be subject to the usual affordability checks and eligibility criteria. This could restrict the pool of potential buyers.
  • Estate agents are likely to charge the same fee for selling a part share as for 100%. This is because they will undertake similar work whatever size share you sell.

Option 3 – Selling 100% share via an estate agent (simultaneous sale and staircasing)


  • Your home can be sold at the open market value, which may be higher than the RICS surveyor valuation.
  • But you may not be allowed you to sell for less than the valuation figure, unless you make up the shortfall. This is something you will need to check with your own housing association.
  • You may be able to select an estate agent of your choice. However, some housing associations have policies requiring you to use a specific estate agent (and possibly proportional splitting of fees charged by that agent). This could be due to them having an established relationship with an estate agent who has experience in dealing with shared ownership sales.
  • Professional services, including photography.
  • You will likely have to pay the same fee to sell a full 100% share or your current 40% share, as estate agents won’t charge less than their minimum fee regardless of the % share being sold.
  • Your estate agent should provide assistance in with liaising with your housing association, and chasing where required. They should also assist with key handover on the date of completion.


  • Some estate agents are not familiar with shared ownership schemes, and this could cause problems or delays.
  • You may end up paying fees to both the housing association and the estate agent. Some housing associations will waive their re-sale fee. Other will insist on being paid, as it isn’t a discretionary term in the lease.
  • A simultaneous staircasing and sale transaction also means there will be an extra solicitors’ firm involved; your housing association’s solicitors, which could slow things down relative to a shared ownership sale not involving staircasing. Bear in mind your housing association’s solicitors may require an ‘undertaking’ (payment in advance) for their fees before they proceed.
  • You may also have to pay Stamp Duty on the final staircasing. You should ask your solicitor to provide you with a calculation of the Stamp Duty payable (it is calculated in accordance with a formula that takes into account what you have paid for the property altogether, not as commonly perceived, on the current market value of the property).

Additional Costs

I’ve outlined the usual costs of selling a shared ownership flat at the end of this feature. But a simultaneous sale and staircasing transaction will result in additional expenditure described below.


  • Your housing association may charge administrative fees for staircasing.
  • On top of the costs discussed below you will need to budget for staircasing costs including, potentially: the housing association’s solicitors fees, a Land Registry Fee and Stamp Duty.
  • Usually a buyer pays the Land Registry Fee but selling via a simultaneous staircasing and sale transaction means you should expect to pay the Land Registry fee, even if the buyer is registering the property.
  • Any shared owner selling a house by staircasing to 100% should also expect higher legal fees where the freehold is transferred. This is because the transfer needs to be checked carefully for appropriate rights, and any service charges which continue to be payable (for example, for repair and maintenance of access roads or a driveway).
  • Selling a flat is a little more straightforward; though the buyer’s solicitor should ensure the Memorandum of Staircasing is registered to avoid any future confusion about whether the property is shared ownership or not! It is an absolutely crucial bit of paper.

Stamp Duty

  • Stamp Duty in relation to shared ownership can be complex. If you made a one-off payment based on the total market value of the property at the time you purchased your first share, no Stamp Duty will be payable on staircasing to 100%. But if you elected to pay Stamp Duty in stages when you purchased your initial share, it’s a bit more complicated. In that case, Stamp Duty would be calculated on the total amount paid in instalments for the property rather than on the current market value.
  • If there is a high annual rent payable under the terms of the lease (once it has staircased to 100%), that would affect the calculation. If your property is a house, your lease should give you a right to have the freehold (though there are some exceptions).
  • You can find more information about how Stamp Duty is calculated, with examples, on GOV.UK.

Leasehold Extension

  • Complexity and therefore costs will mount up further if you need to undertake both staircasing and lease extension in order to make a sale. This may pay off. But make sure to choose a solicitor with expertise in these areas.


Housing association charges for selling vary considerably – as do services provided – so check with your own housing association. Check your lease terms for any relevant information. The following costs will apply no matter which route you take.

Legal Fees

  • The extent of fees payable will depend on whether you sell your 40% share or decide on a simultaneous sale and staircasing to 100%. You will also pay your housing association’s legal fees where they appoint their own solicitor to act for them on the staircasing, which they would normally do on 100% staircasing.
  • There would be additional legal fees if you needed to extend your lease in order to sell.

Freeholder Information Pack

  • The Freeholder Information Pack provides details about how the housing association runs the building (not required for staircasing and selling a house at 100%), but very much required for all flat sales.
  • If service charges are paid to a third party management company you may also need to pay for a Management Company Information Pack. Your solicitor will check the title to establish whether or not a separate Management Pack is required.

Assignment Fee, or Estate Agent Fees (perhaps both)

  • Housing associations typically set assignment fees somewhere between 1%-2% of the sale price of your equity share + VAT. This is effectively a fee for finding a buyer, similar to estate agent fees, although housing associations do not necessarily provide the same services as an estate agent.
  • Be aware that housing association fees are sometimes simply specified as ‘reasonable fees’ rather than as a set percentage. Make sure you obtain confirmation of fees in writing to avoid any nasty surprises. These are sometimes advertised on the housing association’s website or can be obtained from their re-sales team.
  • If you use an estate agent, shop around. Estate agent fees may be considerably higher than assignment fees charged by housing associations. If you have several quotes you may be able to negotiate fees with your preferred agent. Even if you pay estate agent fees, the housing association may still require an assignment fee, although some housing associations might reduce the rate payable. 
  • Make sure you agree any assignment fees (or no fees) in writing with the housing association before you instruct an estate agent.

Admin Fees

  • Policies on admin fees vary from one housing association to another. You will need to check with your own housing association what their policy is. If your housing association does charge admin fees, check whether they are dealt with by the solicitor and deducted from the sales proceeds along with legal fees, or whether the housing association require payment upfront.

Valuation Fees

  • These are the fees charged by the surveyor conducting a valuation of your property. Your housing association may require you to use surveyors from their own panel. If you instruct your own surveyor, and your housing association doesn’t agree with the valuation, they have the right to ask you to pay their own surveyor’s fees too.
  • Whilst the model form of shared ownership lease technically specifies that sales must go through within 8 weeks, this is not realistic. Anticipate the process perhaps taking between 12 to 20 weeks. You may therefore need to budget for updating the property valuation at some point during the transaction.
  • When requesting an updated valuation, you don’t have to have the full valuation done again; you can ask the surveyor for a letter extending the valuation (which is a lot cheaper!) for another 3 months.
  • It’s also worth emphasising to your own solicitor the need to ensure ALL the solicitors up and down the chain are in close contact in agreeing a completion date, and closely monitoring progress.

Energy Performance Certificate (EPC)

  • It is a legal requirement to provide an up-to-date Energy Performance Certificate (EPC) within the first 28 days of marketing any property. If your property is under ten years old, it may be possible to retrieve an EPC online.

Mortgage Fees

  • Check with your mortgage provider if you will be liable for a mortgage exit fee, or early mortgage repayment charges.

Capital Gains Tax (CGT)

  • I have assumed you haven’t sublet your property. But, if you have, you will need to take advice on exposure to Capital Gains Tax.

Other Miscellaneous Costs

  • When you’re creating your budget don’t forget to include removal costs. Also, if required, any improvements recommended by your estate agent to improve the chances of achieving your asking price (particularly given you would have to pay any shortfall between the valuation and the actual price over to the housing association).
  • If you are making significant improvements to the property that may increase the value, obtain permission from the housing association BEFORE doing any works, so that the improvements can be ‘disregarded’ for valuation purposes. 

Zahrah Aullybocus, Consultant Solicitor – Residential Conveyancing

Phone: 01173 741429 or call 0330 058 4012 then dial ext.2743

Mobile: 07740 

With thanks to Copeland Yussuf Chartered Surveyors for background information on market prices and valuations.

Shared owner name changed to protect anonymity.

Featured photo by Marjan Blan | @marjanblan on Unsplash.

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