There are many reasons you might need to get your property valued, including insurance, selling and/or buying, and taxation purposes. All of these can be arduous and stressful processes, so the last thing you want is to deal with a nightmarish property valuation on top of it all.
While the world of home valuation can appear confusing and complex to the untrained eye, the team at Watsons knows exactly how to navigate valuing your property, no matter the reason for it. This simple FAQ aims to help you make sense of this important process and understand the process, without the stress.
What is a house valuation?
A house valuation is simply the process of getting an estimate of a property’s worth at the time of the valuation, which is carried out by an experienced estate agent or independent valuer/surveyor. It’s an essential part of selling and buying a house, as it helps you get a good idea of what a fair asking price would be before you put your property on the market or commit to buying a property.
Factors that play a part in property valuation include:
- The size of the property
- The location of the property
- The condition of the property
- The property’s features, e.g. windows, boiler, garden(s), period features
- The zoning and development potential of the property
- The topography of the land
- Recent sales and/or current property prices in the area
- Accessibility for vehicles, plus any garages and other useful outbuildings
When might I need a valuation?
In most cases, people want a valuation on a property they’re either buying or selling. This includes cases where a person is entering the buy-to-let market, as a valuation can determine what the rent should be for that property and therefore help to estimate just how much money the landlord-to-be stands to make from the investment. For those looking to get a mortgage when buying a house, lenders will often request a valuation prior to approving the loan and deciding the final loan amount.
Though these are the most common instances of valuation survey requests, there are plenty of other situations in which a property valuation would be needed, some of which are explained below.
Probate valuations
If a loved one dies and leaves their property to you, you will need to get a probate valuation, even if you aren’t selling the property. This is because you will be required to complete the HMRC Inheritance Tax form in order to gain legal ownership of the property.
Getting a valuation will also allow you to make an informed decision about whether to sell or rent out an inherited property, and how much for. Similarly, it can help you work out how to go about splitting the money – from selling or renting – between inheritors, if there’s more than one.
Shared ownership valuations
If you have a shared ownership property, you own some of it and pay rent on what you don’t own. You might be thinking of buying a little more of the property, to increase your equity and reduce your rent bill – this is called ‘staircasing’. Every time you increase your share of the property, you’ll need to get a shared ownership valuation to determine the property’s current value. This is so that you can be sure you’re paying the most up-to-date market rate for your new portion of the property.
Matrimonial valuations
If you share a home with a long-term partner and the relationship comes to an end, you’ll probably want to get a matrimonial valuation. This can be commissioned by one person, if you remain on civil terms with your ex-partner, or both parties can seek individual valuations.
If you are divorcing, you’ll need to work out how to separate your assets. Your property is likely to be the most expensive item you own, so getting it valued means you can come to an unbiased agreement based on what the property is actually worth, rather than it being estimated by either side and resulting in an unfair division of assets and/or even more stress than you’re already experiencing.
Help to Buy valuations
If you own a Help to Buy property, you’ll need a specific Help to Buy valuation whenever you decide to sell up, remortgage, or start repaying your loan. In order to meet the scheme’s criteria, this must be carried out by a RICS regulated independent chartered valuer or surveyor, like those here at Watsons.
The Help to Buy Equity Loan requires you to repay the 20% equity loan provided when you bought the property. When you sell, you will pay back 20% of the property’s current value. If you aren’t selling but want to pay off your Help to Buy equity loan, you can either pay the whole 20% or half of it. Whenever you end up repaying, and whatever the circumstances, you will need a valuation to determine the value of the equity loan.
As well as those mentioned above, Watsons offers a variety of valuation options, including: property valuation, lease extension valuation, remote valuation, Right to Buy valuation, RICS Red Book valuation (though most of ours are Red Book anyway), commercial valuation, development land valuation, and Capital Gains Tax valuation.
What’s the difference between a valuation survey and a market appraisal?
While there is an element of subjectivity in a valuation survey, most trusted professional valuers will follow similar processes and reach similar valuation figures. Registered valuers or surveyors have an organisation’s (usually RICS’) stamp of assurance so that their customers can be confident that their valuation opinion can be relied upon. Put simply, a formal valuation is an evidence-based opinion, formed using relevant market data and an internal and external inspection of the property, among other things.
Market appraisals, on the other hand, are carried out before a property is put on the market and aim to give the owner an idea of what asking price is possible. As such, a market appraisal – based on hope – is likely to produce a higher figure than a formal valuation – based upon evidence. Market appraisals therefore might not be a true reflection of what the property is worth, or what it would be valued in a formal valuation, but can still be a useful starting point.
This is especially true if the seller is willing to take action to maximise the value of their property before selling. Market appraisals can make recommendations as to what this action should be, suggesting how to attract buyers and achieve the best sale price. This can include decluttering, gardening, and redecoration.
What valuation survey services does Watsons offer?
An independent home survey or valuation will provide you with a clear understanding of where you stand and what you’re signing up for. By undergoing the survey and/or valuation process, you’re essentially avoiding any unexpected additional costs, stress and hassle further down the line – and who wouldn’t want that?
As well as the valuation services listed above, and our own Bespoke Survey, we offer several RICS home surveys – we are a RICS-regulated company, after all. These range from Level 1 to Level 3, varying in their complexity and comprehensiveness.
RICS Home Survey Level 1
RICS Home Survey Level 1 is designed for clients looking for a professional and objective report on a property’s condition at a very affordable price. Bear in mind it’s less extensive than the higher survey levels.
We generally advise that Level 1 is suited to conventionally built, modern dwellings in a satisfactory condition, but won’t be suitable for older or complex properties, or those in a neglected condition.
RICS Home Survey Level 2
Level 2 is more extensive than Level 1 and less comprehensive than Level 3, as you might have guessed. The report assesses the condition of the main interior and exterior elements of the property, providing a more in-depth inspection of the building, its services and grounds. It doesn’t involve any tests.
Level 2 is suitable for a broader range of conventionally built properties, but again is unlikely to work for complex, unique or older historic buildings, or properties in a neglected condition.
RICS Home Survey Level 3
RICS Home Survey Level 3 is the most comprehensive level, and consists of a detailed inspection of the building, its service, and the grounds. The surveyor will consider individual concerns in the report. As the most extensive survey, this level involves evaluating the property for any potential defects, determining their probable causes, and assessing the need for repairs.
Level 3 is suitable for residential properties in any condition and is the recommended option for older properties, unconventional properties, and those which have undergone, or need to undergo, major renovation works.
Watsons – passionate about property since 1890
As one of the leading firms of chartered surveyors in the East of England, Watsons are passionate about property and experienced in many aspects of the residential and commercial markets, so you can be sure you’re in safe hands. We offer a bespoke service, thoughtfully tailored to each individual client throughout the purchasing process and beyond. If you’re in need of a property valuation or survey, please do not hesitate to contact us today.
