Help to Buy is a government scheme that allows purchasers meeting certain criteria to share 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.
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), or the agreed sale price (whichever is higher).
Staircasing: You will also need a Help to Buy valuation if you want to ‘staircase’. Staircasing is a process that allows you to partially repay your loan without selling the property, so that you increase the share that you own.
If the property increases in value, the amount you owe increases too. If the value falls, so does the outstanding loan amount.
It is therefore important to get an independent valuation when you make any changes to your loan, so that you and the loan provider (the government, in this case) can be sure that the settlement of the loan is fair and accurate.
At Allcott Associates we carry out RICS valuations for RICS Help to Buy valuations, shared ownership valuations and Right to Buy valuations. Our independent RICS registered valuers provide a high-quality and professional service that is fully in-line with both RICS Red Book standards and the requirements of Target (Help to Buy) and housing associations (shared ownership).
Help to Buy surveyors must use strict valuation criteria
Help to Buy loans are managed on behalf of the government by a company called Target. Allcott Associates’ surveyors meet all of the Target Help to Buy valuation criteria:
– We are RICS Certified Help to Buy Surveyors and Valuers
– Valuations are carried out in accordance with RICS Valuation Standards (Red Book)
– We are completely independent from any estate agency
– Our report will be on headed paper, will be signed by a member of the RICS and addressed to Target HCA
– We will provide at least three comparable sales (matching property type, size, and age and within a 2 mile radius of the property in question)
– We carry out a full conflict of interest check upon inspection to ensure no conflicts exist
– We will inspect the interior and exterior of the building and provide a full report
– The inspection date will be shown on the report
Help to Buy surveyor valuations carried out by Allcott Associates also comply with the RICS ‘Red Book’ – a guidance document that sets out high professional and ethical standards for property valuations.
– Inspection of the property by a surveyor local to the area
– Overview of the property, its construction, locations and accommodation
– Overview of the property’s general condition, with photographs
– Details of three comparable properties nearby that have been sold in the past 12 months
– Valuation of the property, with a detailed description of the evidence and assumptions used
In accordance with Target requirements, Help to Buy valuations are valid for 3 months.
The first page of the report provides an overview of the property, with information on its location, size and tenure. This is where you can find out when the property was built and whether or not it is standard-construction. Available data on the sales history will also be included here.
Next, you will see a list of the comparables used to help determine your home’s market value. Comparables are similar properties nearby. These are assessed against your property for things like size, condition, fittings and location. This helps the surveyor decide whether the comparables would be expected to have a higher, lower or similar value to your property.
At the end of the report you will find the surveyor’s assessment of the current housing market in the area – they will note whether it is rising, static or falling. Finally, you will find the estimated market value, along with any pertinent notes and evidence on how that value was determined.