Valuation of Shared Ownership

Co-Ownership and Equity Assessment

In Manchester’s multifaceted, rapidly evolving real estate environment, the concept of shared ownership has emerged as a sought-after opportunity for many first-time buyers – the shared ownership valuation—the process by which the value of the property is appraised and how that value affects the initial and ongoing costs to the shared owner—lies at the very heart of this program. 

The person most essential to determining the value of a shared ownership property is the Chartered Surveyor – the Chartered Surveyor is, above all, a qualified valuer, regulated by the RICS (Royal Institution of Chartered Surveyors), who has the singular task of determining how much a property is worth in today’s market. 

When an RICS surveyor comes to a figure that he or she is confident about, they have looked at lots of different parts of the property and lots of different things about the property, as well as at the same figure for lots of other similar properties – you might ask why it even matters how much a property is worth when you are looking into shared ownership. There are actually a few really vital times when a shared ownership valuation is necessary: 

  • Finding out how much the property you wish to buy or sell is worth is a requirement of most housing associations and mortgage lenders.
  • If you have opted to be a joint owner of a shared ownership, you need a valuation before you can move ahead with what’s called staircasing: the point when you add to your share in the property.
  • In case you will perhaps sell the house you need a valuation to know the state price at the official market sorry for this late response.

Moreover, a solicitor assumes an integral part in this operation. He or she will work with the surveyor, housing association, and mortgage lender to ensure that all legal matters related to the transaction are properly handled, thereby lending greater authority to the valuation.

What does a Shared Ownership Valuation look like?

A shared ownership valuation establishes the current market value of your home and makes some projections about future value; the surveyors make various assumptions about the types of shares you have and the types of shares they think you might like to have. They come up with a figure that is intended to represent the value of your shared ownership interest in your home.

If you aren’t planning to sell your house, then any work you’ve done or improvements you’ve made to your property are excluded from the RICS valuation, this valuation comprises an inspection conducted by an RICS surveyor and is the most basic type of valuation you can get for a property.

However, an in-person inspection by a surveyor does not equate to a detailed analysis of your property’s condition or a rundown of needed repairs—it simply is not that kind of report; while the Property Survey Report may make a list of things that are wrong, it doesn’t do the RICS valuation any justice if that were the intention.

If you want to buy more equity in your Manchester property or redeem your Help to Buy loan, you will need a valuation from an RICS Registered Valuer and here’s why: it’s essential to have a clear idea of what your property is really worth before you start haggling over the price at which the housing association will sell you the remainder of your home.

What are the Benefits of a Shared Ownership Valuation?

From finding out what your home is really worth, to increasing your stake in your home, here’s how having your Manchester home valued will help build your equity:

  • Obtain a valuation for your home from an independent valuer: an equity valuation tells you how much further equity you can buy from your developer or from a Housing Association.
  • Own consideration rights: if you buy more equity, you will get more reduction in your rent. You could make it more fair if you get an equity valuation done.
  • Guard your economic security: determining what your property is worth and what it would cost to purchase additional equity is essentially gaining control over money you have yet to make.

What’s Staircasing?

Staircasing refers to the process of purchasing additional shares in your home, and can be done in amounts as small as 10% to 15% at a time. When you staircase, the amount of rent you pay to the housing association drops proportionately, and in many cases, this benefit is seen, quite rightly, as a way of saving money. 

The actual process of staircasing can be started only after the shared owner has lived in the property for a year, and it begins with something called a “shared ownership valuation.” This is a bit of a misnomer, though, since the staircase purchaser is technically trying to buy an additional share, not a “novelty” valuation of the property.

When you purchase a plot of land at a housing association development, the price is determined by the current market value of your home, not by how much you paid when you first bought it – for instance, if your property has appreciated in value, then the price for that extra share will be greater than what you initially paid. However, if you are still staircasing and have not reached the point of paying 100 percent of the shares to own your property, then you might be paying some rent on the remaining shares – after you reach the 100 percent level, the rent paid is only for the time it takes to staircase. 

Issues with Shared Ownership Valuations

Assessments of shared valuation ownership, despite their attractiveness for other reasons, are not free from problems and pitfalls – one particularly annoying issue has to do with the differences that can crop up between valuations; since valuing the property is such a complicated and involved process, two different RICS surveyors might come up with two different – and possibly conflicting – figures. If this isn’t bad enough, the situation is further confused by the fact that staircasing and the selling price of properties can be the subject of quite heated negotiations, with quite a lot of money riding on the outcome.

One more problem is with the way shared ownership is distinctively portrayed. As a model that involves collaboration between the resident and the housing association, there can be some arguments over the all-important issue of property valuation. The housing association would tend to favour a higher valuation—better to bump it up and far outpace inflation, so as to recoup not only what it has sunk into the property but also a good bit more to ensure that when the initial part-seller actually part-sells again, it will certainly not have lost out on the deal. Yet, on the side of the shared owner, there are much lower valuations to be interested in.

Furthermore, trusts under shared ownership may simply not be worth as much as those on the open market: shared ownership properties are often restricted by a cap on re-sales and also by a cap on the buyer’s income. This might not work out for shared owners who want to benefit from growing property prices.

Is Shared Ownership Valuation Needed?

If you plan to purchase a larger stake in your home, you’ll need a precise, professional valuation to be sure you are paying a fair price. You must engage a surveyor accredited by the Royal Institution of Chartered Surveyors – In the Manchester area, you can contact us to arrange for a valuation to be conducted by one of our members—full details are available on this website.

Surveys of Commercial Property

If you’re thinking of acquiring, leasing, subletting, disposing of, or altering commercial premises in Manchester, you would be well advised to locate a surveyor skilled in the nuances of commercial building surveying – should you spot a defect in a commercial building you can use that information to negotiate an asking price for the property that’s considerably lower than what the seller originally wanted, or you can talk your way out of a bad deal altogether. 

Our Manchester-based team of RICS-compliant commercial building surveyors is equipped to handle matters throughout Manchester.

Contact

Our team prioritizes client care above all else. We look forward to being in touch with you so you can instruct a surveyor in Manchester, London, Bristol, Birmingham or Cardiff. You can reach out to us easily. Just fill out our form, and we’ll get back to you with a free quote for your survey. All our surveyors are qualified as members of the Royal Institution of Chartered Surveyors (RICS) and we are one of the UK’s leading providers of building survey and valuation services:

The property survey you commission will be carried out by an accredited professional. Your chartered surveyor will be a member of the Royal Institution of Chartered Surveyors (RICS) or the Chartered Institute of Building (CIOB), or will belong to some other industry-standard professional body. Rest assured; you will receive highest quality of professional service for your survey.

Scroll to Top