RICS Help to Buy Valuation:
What is a Help to Buy valuation? Help to Buy is a Government scheme that allows purchasers meeting certain criteria to share the ownership of their new home with the Government. If you have purchased a home using this scheme, you will need to get an independent valuation when you come to sell the house or repay the Government loan. Unlike mortgages from banks, the help to buy scheme loans you a proportion of the property’s value, rather than a set amount of money. The amount that needs to be repaid depends on the value of the property at that moment in time.
What are your plans?
Full redemption: if you sell your property, you will have to pay back all of your Help to Buy loan. The amount that needs to be repaid depends on the value of the property at that moment in time (as determined by an RICS Help to Buy valuation)
Staircasing: You will also need a Help to Buy valuation if you want to ‘staircase’. This allows you to partially repay your loan so that you increase your proportion of ownership. If the property increases in value, the amount you owe increases too. If the value falls, so does the outstanding loan amount. Therefore, it is extremely important to get an independent valuation (by a suitably qualified valuer) when you make any changes to your loan so that you and the Government can be sure that the calculations with respect to monies owed are accurate.
RICS Independent Valuation:
There are several reasons that a RICS Chartered Valuer may be required to assess the value of a property. This may be because a bank or other lender wants to determine the sums they will lend based upon a percentage of the valuation of a property. Similarly, an Independent Valuation may be used to provide a figure that property buyers and sellers may use to agree on other contracts, shared ownership percentages, profits percentages, or you may just need a second opinion.
RICS Red Book Valuations differ from an estate agents' valuation appraisal. Surveyors will inspect the size, condition and location of the property; and will then make a thorough technical assessment using their extensive knowledge and experience.
The results of this assessment, combined with information from comparable properties in the local area that have recently sold, are used to make evidence-based valuations. The intention of a Red Book Valuation is to provide an industry standard when it comes to the methodology and details of property valuations, using the guidelines issued by the Royal Institute of Chartered Surveyors.
A surveyor carrying out an Independent Valuation is indeed acting independently. Other parties who may be part of the buy/sell chain often have potential conflicts of interest. An Estate Agent may earn a commission from a sale/purchase, and a solicitor may receive a conveyancing fee if a valuation achieves a particular sum. Therefore, it is essential to ensure that you are instructing a RICS Registered Valuer who is totally independent of any other parties involved.
There are many different types of valuations, from your standard Red Book Valuations to Help to Buy Valuations, all the way to Lease Extension Valuations or those for Probate purposes. If you are not quite sure what you need, why not give one of our dedicated Valuation Experts a call? They will be able to provide you with the best advice on the type of valuation you require.