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If you purchased a home using a Shared Ownership Scheme and now wish to sell it or acquire additional shares in it, you’ll need to finance a shared ownership appraisal. Help to Buy is one of many schemes like this; in this segment, we’ll look at similar appraisals in other schemes.
When a property is sold, it typically involves an arrangement with a housing association regarding equity ownership. Though each housing association has its own rules about what to do when a property is sold—and, particularly, how and when to repay any loans that were taken out to help with the purchase—they all have a few important things in common.
If you intend to sell or pay down your loan, you must secure the services of an independent valuer who is a member of RICS (Royal Institution of Chartered Surveyors) or other suitable accreditation body. This guarantees that your valuer is completely independent of any estate agency or similar organization and is not in any way connected to the value they put on your home, which is essential because the value they put on your home has to be its true value.
Valuations for shared ownership must conform to the RICS Red Book, a set of professional and ethical standards that determine how all sorts of valuations, including those for shared ownership, are carried out. The current value of your home may not reflect any improvements you have made to it.
Depending on your housing association and the reason for the appraisal, the current value may be set without consideration for significant improvements that you have made, such as upgrading your kitchen or bathroom.
When a property is to be shared in ownership, it is vital that it be valued correctly. A surveyor is employed for this task and carries out a careful investigation of the property—its construction, location, size, and number of rooms. The overall condition is noted, and though the surveyor does not carry out an inspection of every item in the property, he or she makes some judgements about probable issues with the property and its services. The basis of the valuation is what the surveyor knows about the property and the near-term local real estate market.
Typically, a shared ownership valuation is only valid for 3 months. If your sale has not closed within that timeframe, and you’re not yet ready to commission a second appraisal, you can ask the first appraisal company if they will do a desk-based research exercise to extend the first appraisal for another 3 months.
The makeup of your Shared Ownership Valuation is as follows:
An illustration of a Help to Buy Valuation Report is given in the first page of the document, which contains a brief overview of the property that is up for valuation. This overview is brief but filled with pertinent details that are likely to be shared with the lender. As part of the report, the valuers have to provide a summary description of the property. It is fair to say that the property description is one of the key parts of the report, and therefore, the valuers attempt to cover that section with as much detail as possible.
Next, you will see a list of the comparison properties the surveyor used to figure your property’s actual value. These are properties that are somewhat like yours and are located in proximity to it. The surveyor looked at their size, condition, location, and several other factors. Finally, the surveyor assessed whether these properties would have a higher, lower, or similar value compared to yours.
The surveyor’s opinion of the local housing market’s current state will be in the report’s last section. It will say whether the area is experiencing a rising, steady, or declining market. The last section will also contain the valuation estimate, along with any explanatory comments and evidence needed to support the conclusion.
The Full Building Survey report includes the following:
When it comes to the detail that the surveyor will go into concerning defects, repairs, and maintenance, the Homebuyer Survey is fairly standard. Full Building Surveys, however, are more refined and go into more detail about possible and likely defects. Repairs and maintenance are covered in more detail. The Survey cost depends on the age, size, and value of the property.
The analysis they undertake is a visual inspection. This means that, for the most part, the building components that can be seen will be looked at and assessed in accordance with the surveyor’s remit. The Home Survey Report will show you the visible defects and then go on to discuss the kinds of partially hidden or totally hidden defects that the surveyor thinks you should be aware of. It will also try to clarify what kinds of repair work need to be done and the nature of the repairs. The survey is effectively a way to consider “defects” and their potential impact on the building.
A Building Survey Report contains the most important information for understanding the condition of a property. The surveyors that undertake the work follow a set procedure. The first part of the report contains a general overview of the property and its surroundings. The second part details the major and minor problems with the property’s components, inside and out. These problems range from serious structural defects to issues with doors or windows that don’t close properly, and everything in between. The report is written in clear English, complemented by diagrams and photographs. If any of the problems found are what a surveyor might consider important, that’s what the report indicates—using clear and unambiguous language.
Surveyors usually use a tick box to indicate methods of repair when drafting a building survey report. They are also required to comment on the timescale of any repairs. A condition rating is typically included: what needs to be addressed immediately, what is in the process of deteriorating but is in reasonable condition, and what has not deteriorated at all.
A building surveyor is responsible for a variety of checks and tests during a building inspection. These could be checks or tests for damp and woodworm, or they could be visual inspections of the building’s structure. In building surveying, there are visual inspections of roofs – checking for tiles and slates (if applicable) and also checking for leadwork (if applicable) and looking at the junctions between roof and wall. If the wall structure has brick in it, the surveyor will visually check for any “spalling” (brick breaking apart visibly) and any bulging (brick failing to hold its place visibly), for example.
If defects need fixing immediately, then the options recommended for this survey specify what to repair and give some idea of how long the problem has existed. For the most part, this survey describes recommended repair approaches that are standard in the industry and that do not require excessive expenditure. Future maintenance is also discussed, including what to expect when the problem being surveyed is not repaired and what to expect with repairs that are made but with questionable methodology.
Your surveyor will explain some of the legal aspects of purchasing the building, covering—in as much or as little detail as you desire, and their implications, but this is subject to your solicitor verifying.
You might consider having a separate market valuation done to determine whether the property’s asking price is warranted. You’ll also need a reinstatement cost valuation for insurance reasons.
RICS’s industry guidelines suggest building surveys for properties that are large, very old, in some disrepair, or have unusual features. Building surveys are also recommended if you plan to do any significant renovations or extensions.
If you’re purchasing a relatively modern home that’s in decent shape and built to ordinary standards, then a Home Buyer Survey is an acceptable choice. If you want the assurance of an inspection and report that are pretty much guaranteed to turn up any issues that might be hidden or just hard to see, then you should go for a Full Building Survey instead.
The Full Building Survey is more detailed; it is more specifically tailored to the property your surveyor would be inspecting. It also comes with more advice on the visible defects found and on the potential hidden defects that they suspect may be present. Your surveyor will illustrate reports with photographs so that you can clearly see what has been discovered. Both the Home Buyer and Full Building Surveys describe the repairs needed, the order in which the repairs should be done, and the kind of “maintenance measures” that will be required to keep the property in good condition.
A HomeBuyer Report does include a market valuation as well as reinstatement costs. However, a Full Building Survey does not. The main reason for the differences in what is and isn’t included in the two types of reports is how focused the reports are on the condition of the property. The Full Building Survey is the most in-depth and comprehensive survey of a property that you can have done.
All the professionals on our panel, whether Building Surveyors or Structural Engineers, are members of the Royal Institution of Chartered Surveyors (RICS) or hold equivalent accreditation from an industry-standard body (e.g. RPSA or CIOB). This ensures that you can be completely confident in the thoroughness and comprehensiveness of your Building Survey Report or Valuation. Your surveyor will be independent and will provide you with expert advice based on their judgment and without any bias.
Looking for a Chartered Surveyor? If you are buying a property, contact us for a building survey. Our panel of CIOB, RPSA and RICS surveyors will help you with the Level 2 or Level 3 property survey you need in Notting Hill. We can also assist you in Red Book Valuations, Party Wall Awards and other services. Reach out to us today for building surveyors, valuers and party wall surveyors in London!
