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In Notting Hill’s complex real estate market, “shared ownership” offers a path to homeownership for many first-time buyers that may otherwise be out of reach. This joint-ownership arrangement requires a reliable property valuation as its linchpin—a valuation ensuring that the buyer, co-tenant, and mortgage lender can trust that the property will “behave” as a property should under the current, or even a future, housing market.
The Notting Hill shared ownership property market certainly behaves as any traditional housing market. This page tells you what you need to know about shared ownership property’s valuation process.
In a shared ownership arrangement, the crucial individual for property valuation is the Chartered Surveyor. This is a qualified, RICS-regulated professional with the job of determining how much a given property is worth in the marketplace. A property valuer with the RICS looks at a lot of different aspects of a shared ownership property and its “neighbourhood” to come to what they consider a fair figure. Shared ownership valuation is key for several reasons:
Moreover, a solicitor has a significant part in the process. They work closely with the surveyor, the housing association, and the mortgage lender to ensure that all the legal parts of the deal are dealt with as well, making the valuation much more sound.
You should also know that a shared ownership valuation is not a one-time static deal. If the property market is going up or down, the value of your share is doing the same. Being aware of these kinds of changes can make a real difference, particularly in a market as quick as Notting Hill’s.
A Shared Ownership valuation results in a report that tells you the current market value of your home, which we then use to determine what Shared Ownership means in your specific situation. Surveyors offer a few different types of reports, but our panel usually uses the RICS valuation guidelines (Red Book) because it is widely accepted in the industry.
Any work you have done or “improvements” you have made since your last valuation (or even since you first purchased your home) are not included in this current report because it is strictly a “valuation” report. As far as the report is concerned, your home is in the same condition as it was at the time of the last valuation.
If you desire to acquire additional equity in your Notting Hill property or to pay off your help-to-buy loan, enlisting the services of an RICS Registered Valuer to provide a formal valuation is of utmost importance. Using this course of action, you will be able to negotiate the increase in share and your property will be valued at a fair rate.
You can learn the true value of your home, and, if you so desire, increase your equity stake in it, responsibly and affordably. Here’s what the team believe are the major benefits:
Staircasing is a common term used for a shared ownership scheme. When a person ‘staircases,’ they buy an additional percentage of a property, which they initially co-owned. In this way, the scheme aims to help those who can not afford to buy a house outright but can manage to pay a mortgage on a smaller property. By initial co-ownership and subsequent purchase, the scheme allows a person to own the house in time.
Staircasing allows you to acquire an additional share of your property in the shared ownership scheme. You can buy anything from 10% to 20% of the property until you accumulate 100% ownership—with the benefit that, as your share of the property increases, your rent to the housing association decreases.
When you are in a shared ownership arrangement and want to ladder up to full ownership, you first need to have a shared ownership valuation done. The property you are purchasing will be valued by a RICS-registered valuer who will base the valuation on the current market conditions; several comparable properties; and, most importantly, the condition of the property to be purchased. The valuation that the RICS-registered valuer comes up with is considered valid for 3 months.
Your share price is directly related to your home’s worth and not some arbitrary number based on when you bought it. If your property has appreciated in value—hopefully, it has—then buying that added share will cost more than the original purchase of your first share. Once you own all the shares and have “staircased” to the top, you are free, clear, and no longer renting part of your property from the housing association. On the other hand, if your property’s total value qualifies it for stamp duty, then you’re going to have to pay extra.
Even if shared ownership’s other perceived advantages make it an attractive option, its valuations aren’t without problems. One of these problems is that shared ownership properties are usually at a discount to the market price, and that discount isn’t always applied consistently or fairly.
Failure to achieve a fair and consistent discount price can create a situation that, in the long run, is disincentivizing to shared ownership because the avenue becomes less affordable.
Another matter is shared ownership’s special nature. This model is a partnership-type arrangement between the resident and the housing association, so it is bound to have its share of disagreements, especially over property valuation. Now, the housing association is likely to want the property it has shared ownership in to be valued as highly as possible, since that would maximize its return in the event of resale or staircase. You, on the other hand, might prefer as low a valuation as possible, since that would minimize your financial outlay.
Furthermore, shared ownership trusts might not increase in value at the same rate as those on the open market, due to resale and buyer eligibility caps, an important consideration for shared owners looking to cash in on property market growth.
If you plan to purchase a larger portion of your shared ownership home, you will need an accurate valuation from an RICS-accredited surveyor. The valuation is valid for 3 months. So, reach out to us and a member of the Notting Hill Valuation Surveyor team will conduct a Shared Ownership Valuation for you.
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.
When it comes to valuing assets for the Charities Act 2011, appointing the correct surveyor is critical for compliance. There are three key facets to ensuring that a surveyor is appropriate:
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!
