Help to Buy Valuations
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selling a property and help to buy
Are you looking at selling a property which you bought with the assistance of a Help to Buy Loan? If so, you’ll need a valuation to determine the Market Value. This Valuation needs to be compliant with the RICS Red Book and undertaken by an RICS Registered Valuer, of which we have a number at Websters Surveyors and can help.
There tend to be two different stages that you may want to consider instructing us. One is before you market the property or altneratively the other is once you have an agreed sale price.
Getting a valuation done before you market is sensible as it can help inform you when considering how much to ask through an Estate Agent. You will after all be paying back the scheme administrator based on the higher of the price achieved and the valuation. Getting a report done helps you to determine what your budget is likely to be for buying somewhere else.
However, if you didn't get a valuation done at that time, you can of course have one done whilst you are marketing the property or even when there is a price agreed. If there is a price agreed, we would of course need to discuss that with you as it is evidence that can play a significant factor in our determining a Market Value. We'd also then be happy to discuss it with your Estate Agent as well.
The Industry standard is for Valuation reports to be valid for three months. If an update is required, then in nearly all instances, we would provide this at a reduced fee for a desktop basis.
Shared Ownership Valuation
Shared Ownership is another product of the Government Help to Buy scheme. The scheme is for eligible individuals to who can’t afford a 100% mortgage of a home to buy a share of a new build or resale property. The shares are usually between 25% and 75% of the home’s value and the homeowner pays rent on the remaining share.
If you are a leaseholder of a Shared Ownership property and want to buy further shares in your property. This process is known as staircasing, this process enables you to own a greater proportion of your home. The greater the share you buy of your home, the less rent you will have to pay to the housing association and If you staircase to 100% you become an outright owner and pay no rent.
As the other share in the equity is owned by a public body, it is a requirement for the Valuation Report to be produced by an independent RICS Registered Valuer.
Currently, the Help to Buy scheme is administered by a company called Target who have specified requirements in what they consider is acceptable Valuation practice. This is catching a few firms out but due to our awareness of their requirements, our reports will be compliant. For example, they used to accept a minimum of three comparables but this recently changed to six, unless there is good justification why that is not possible. The comparables must be like for life in terms of type, age and size and the report must be addressed to Homes England.
What are the benefits of staircasing?
There are many benefits in staircasing, in our opinion there are Three main benefits these are:
• Reduced Rent - by reducing the percentage of your property that you rent from your local housing association you will also cut your monthly rent.
• Increase in value - The more of your home that you own the greater you’ll benefit if its value increases.
• Mortgage Choices – If you staircase your way to owning 100% of your home you’ll be eligible to get a standard mortgage which tend to be cheaper, rather than a mortgage suitable for shared ownership
• Control - If you own your property outright (becoming a 100% owner) you are not under restrictions from another party owning a share
Once instructed to carry out a Valuation, we are normally able to provide our report within a week and can often, if necessary meet tighter deadlines where required. Larger portfolios may of course take longer but we will discuss implications with you at an early stage.
At Websters, we are Chartered Surveyors, regulated by the Royal Institution of Chartered Surveyors. Our services span most of London and some surrounding areas including Hertfordshire, Buckinghamshire, Essex and parts of Surrey and Sussex.
Please contact us if you would like to discuss your requirements on 020 8017 1943.