Purchasing or selling properties for the first time can be complicated, nevermind when you are under a shared ownership. As such, it is important to know the legal requirements regarding chartered surveying when you are under a shared ownership. In this article, we discuss whether or not you actually need a surveyor for shared ownership.
So, do I need a surveyor for shared ownership? If you own a property under a Help to Buy Scheme or Shared Ownership Scheme, and are looking to sell your shares or purchase more shares, you will need a surveyor. It is a legal requirement that a RICS chartered surveyor completes an independent valuation on shared ownership properties to justify the value before moving forward.
Keep reading to learn more about surveys for shared ownerships, including what a shared ownership valuation involves, and what happens if you don’t agree with the lender’s valuation.
Do I Need a Surveyor For Shared Ownership?
If you have purchased a property under a shared ownership agreement, such as a Help to Buy Scheme, and are wanting to sell it, or want to buy more shares in the property (also known as staircasing), you will require a valuation. In this case, it is a legal requirement that the property must be surveyed by a RICS registered surveyor. This will ensure that an independent valuation is provided for the property and factored into the mortgage valuation when the property is sold.
If you wish to sell off, or buy more shares in your property, the chartered surveyor completing the valuation must be registered under RICS. This is important because it will ensure that a valuation is formed with no bias towards either party. The RICS’s qoverning body is a globally recognised governing body, that promotes some of the highest standards in property surveying, so you can be confident that you will be receiving a fair and accurate valuation on your shared ownership property. The Government normally part-owns shares within Help to Buy properties, therefore they will arrange their own surveyor to visit your property to calculate a valuation. It is important that you arrange for an independent surveyor to complete a valuation on your behalf, to cross reference against the other party’s valuation.
What is a Shared Ownership Valuation?
A shared ownership valuation is an independent valuation that is completed when someone wishes to buy more shares of, or completely sell their property, which falls under a Help to Buy Scheme or a Shared Ownership Scheme. The valuation takes into consideration the condition of the property and other aspects such as the area, to calculate a numerical value for the property. From this, an agreement can be formed, and a price can be offered for the buyer to purchase more shares in their property or for them to sell their property.
What does a Shared Ownership Valuation Include?
When a shared ownership valuation is completed accurately, it takes into account a variety of factors which are then used in the calculation of the valuation. It is important that each of the factors are considered properly because if one is missed out it may significantly affect the figure of the valuation, which may result in the owner paying more for additional shares than they should be. Below we have detailed the main factors that should be considered in a shared ownership valuation.
|Inspection of the Location and Construction of the Property:||A local chartered surveyor will be required to complete an inspection of the location and construction of the property. This can include assessing the local amenities, landmarks, and transportation accessibility as well as recognising any key issues with the structure of the property. These two factors can alter the value of the surveying significantly, especially if the area is well-known for crime or the property has a serious structural issue that could affect the future of the property.|
|Overview of the Properties General Conditions with Photos Taken:||A local chartered surveyor will be required to complete an inspection of the location and construction of the property. This can include assessing the local amenities, landmarks, and transportation accessibility as well as recognising any key issues with the structure of the property. These two factors can alter the value of the surveying significantly, especially if the area is well-known for crime or the property has a serious structural issue that could affect the future of the property.|
|Details of 3 Similar Nearby Properties:||As part of the shared ownership valuation, the chartered surveyor will also need to identify 3 similar properties in the area that are close in size, age, and type. The 3 properties must also be within a 2 mile radius of the property being valued to ensure that there is a realistic comparability between the locations of the properties. By identifying 3 similar properties in the area, the surveyor will have some guidance on what similar properties are valued at and this can be very useful in calculating the property valuation.|
|Valuation of the Property:||Once all of these factors have been considered, the RICS chartered surveyor will come to a decision on a valuation of the property. This should include a detailed description of any issues found in the property alongside evidence in the form of photographs. Assumptions made on the property in terms of area or structural problems such also be explained in this section too.|
What Happens if You Don’t Agree with the Lenders Valuation?
In most cases, under a shared ownership valuation, the chartered surveyor will come to a similar valuation as the surveyors provided by the Government. However, on some occasions they may not agree, so it can be helpful to know what your options are. Below we have explained the options you have if you don’t agree with the valuation provided.
Provide Evidence of 3 other Properties:
If you do not agree with the valuation provided by the Government, one of your options would be to contest it by providing evidence of 3 other similar properties. These properties must be similar in size, age and location to be considered truthfully comparable, but if so they can be a great argument for disputing the lender’s valuation.
Send the Valuation to the Government:
If the lender is from a private company, you can gather your evidence and send it across to the Government to be appealed. The Government can then assess the information and recommend an alternative valuation if they find it appropriate to do so. This may not work in your favour every time, but is still an option.
Cease the Application and Request Another with a New Surveyor:
If at this point you are still not pleased with the valuation you have received, you can cease your application and restart the whole process. This might seem like a tedious process but it means that you will be able to request a different surveyor. It is important to note that you cannot request a specific surveyor but you can request an alternative one. If you truly believe that the valuation is not accurate, then this can be a way of getting a different opinion.
Shared Ownership Valuation Surveyors at Crest Surveyors
Crest Surveyors are experienced RICS registered chartered surveyors who can be trusted with RICs property valuations and Shared Ownership Surveying. Providing both independent and honest valuations for your shared ownership properties, means that you can feel confident when looking to sell or buy more shares in your property.
If you are interested in our Shared Ownership Surveyor services, click here to find out more.