Obtaining a valuation when selling a house bought under the Help to Buy Scheme

Obtaining a valuation when selling a house bought under the help to buy scheme.

When selling a house bought under the help to buy scheme (or repaying the loan in part or in full), Target HCA have specific requirements, one of which is to obtain a valuation.

The valuation must be carried out by a Chartered Surveyor (FRICS or MRICS), must be independent to an estate agent and must be someone who is not known to you.

The Valuer must inspect the property internally and externally.  It is likely that the Valuer will also have questions to ask you such as whether the property is freehold or leasehold, the extent of the plot, whether there are any garages or parking spaces outside the plot, whether there are any shared drives/access ways, etc.  The Valuer will also need to confirm the agreed purchase price.

The Valuer will research sales of comparable properties, making adjustments for any differences in size, location, changes in market conditions, etc.

The Valuer will prepare a report which will include a description of the property and its location.  It will also include brief details of at least three comparable properties in the area which have sold (or are under offer).  The report will set out the Valuer’s opinion on the value of the property based on the inspection and comparables.

Target HCA place a time limit of 3 months on the Valuation, therefore many homeowners choose to wait and instruct the Valuation when a sale has been agreed, rather than when the property is first offered for sale.  If the sale of the house does not complete within the 3 month period then a further valuation will need to be obtained.  Target HCA will accept a Desktop Valuation by the original Valuer provided certain criteria are met.

For further information visit     http://www.myfirsthome.org.uk/

To find a suitably qualified Chartered Surveyor who carries out valuations in your area visit   www.rics.org/uk

See also our home page for further information on buying and selling a house.

Source:  Target HCA Customer Information Pack

 

buying and selling a house

 

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What affects the value of a property? 

There are several factors which may affect the value of a property.    Firstly, a mortgage valuation must not be confused with an estate agent’s valuation.  An estate agent’s “valuation” is a suggested figure to market a property to try to get the best price for the vendor, while at the same time being realistically pitched to obtain interest from potential buyers.  This figure can be adjusted during the marketing process, depending upon the level of interest.  This article deals with mortgage valuations rather than estate agent’s valuations.

A valuation for a mortgage is prepared to advise a lender whether a particular property is suitable security for an advance. It is typically carried out by a Chartered Surveyor who has experience in valuing that type of property in that particular area.  A valuer will look at details of comparable properties, check their sale prices, consider how long they were on the market, and make allowances for any differences and any changes in the market.  The valuation figure is arrived at after careful consideration and the valuer carries a high level of responsibility.

Factors which affect the value of a property include:

1. Location – A house in a sought after suburb will have a higher value than an identical house in a less desirable part of town due to a higher level of demand.

2. Size – In many cases a house with more bedrooms and other accommodation will have a higher value than a smaller property.  However, most house buyers are aware that some areas of their town offer “better value for money” than others and therefore size is not the only factor to affect the value of a property.  Size needs to be considered alongside a number of other factors.

3. Neighbouring properties/adverse land use – If a house is situated next to or close to something which a typical purchaser would find undesirable, this is likely to have an effect value.  This may include a property which has not been maintained and is unsightly, a business which generates noise, smell, a large amount of traffic, etc.

4. Condition – A valuer will take into account the condition of the property and the approximate cost of improving.  However, remember that the inspection for a mortgage valuation is not a survey.

5. Tenure – Tenure can also affect the value of a property.  Freehold flats often have a lower value than equivalent leasehold flats.  Some mortgage lenders do not lend on freehold flats and this affects saleability, and in turn, value. Also, a property with a short lease or any other onerous restrictions is likely to be less saleable, and therefore have a lower value, than a property with a longer lease and no onerous restrictions.

6. Parking – Most households have a car, and many have more than one.  A property with ample parking will be more desirable than a comparable property with no parking, particularly if street parking is restricted (possibly with the exception of some prime city centre locations).

7. Alterations without consent – If a property has been significantly altered or extended without the required Planning or Building Regulation approval then in some circumstances this may affect value, particularly if works have been carried out recently and enforcement may be required.  Also, alterations carried out without the required consents may be substandard, and possibly dangerous, eg, where electrical wiring has not been carried out by a competent electrician, and this may affect the value of a property.

See also: What can I do if my house is down valued?

 

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Buying a house with an extension: what to check – Local Authority approvals, substandard construction

When buying a house with an extension there are a number of issues to consider.

Local Authority Approvals – buying a house with an extension

The purpose of Building Regulations is to ensure that construction works are carried out to the required standard, are safe and have a satisfactory level of insulation.  If you are buying a house with an extension which does not have Building Regulation approval then its construction may be substandard or even dangerous.   It is possible that a lack of Building Regulation approval may affect the buildings insurance policy and/or mortgagability (and saleability) of the property.

If you plan to buy a house with an extension then you/your solicitor must make enquiries to establish whether the required Local Authority approvals have been obtained.  Obtain copies of all documentation and keep these with your other purchase documents.

However, you may find that the works were carried out without the required Local Authority approvals.  If this is the case then the Local Authority may choose to take enforcement action against the owner of the property (even if the works were carried out by a former owner).  In other words,  if you purchase a house with an extension which does not have the required Local Authority approvals then there is a risk that you will be required to rectify the works at your own expense.  The owner of the property may apply for retrospective approval, however, this may delay the sale of the property.  A speedier solution may be to take out an indemnity policy.  Your solicitor can advise on the suitability of an indemnity policy for your particular situation and can advise on the policy details and any limitations.

For further information on what works require Planning Permission, Building Control Approval and Listed Building Consent visit the Planning Portal using the link below:

https://www.planningportal.co.uk/

 

Half brick rear additions

Many older properties have additions (often at the rear) which are of half brick (single skin) construction.  Some were former outbuildings which have been incorporated into the living space.  This form of construction is substandard, may allow rain penetration, high heat loss and condensation.  If you are seeking a mortgage then it is possible that a retention may be made (or an undertaking to upgrade the walls) until works have been carried out to a satisfactory standard.

 

Lack of a cavity tray where conservatories and single storey extensions are provided

Where a single storey part is provided there is normally a cavity tray in the cavity wall immediately above the lower roof.  With cavity walls it is normal for rainwater to pass through the external leaf and into the cavity. A cavity tray is needed in this position to help water entering the cavity to pass to the outside instead of causing the inner face of the wall below to become damp.  In other words, if a cavity tray is not inserted into the cavity wall where a single storey extension or conservatory are added then there is a risk of dampness to the wall internally, ie, inside the house.

Damp patches may be noted to the wall or wall plaster in the area close to the new abutment to the outside wall.  If you are having a survey then your surveyor can check this area with a moisture meter.  A moisture meter can detect dampness which may not be visible to the naked eye.  If you are having only a mortgage valuation but no survey then the valuer may not check this area with a moisture meter.  See also – is a mortgage valuation the same as a survey?

If dampness is noted due to a lack of a cavity tray then it will be necessary to insert a cavity tray at this position.

 

Low pitched roofs to single storey extensions

Many people would prefer to have a pitched rood rather than a flat roof over an extension as they consider it will have a have a longer life and need less maintenance.  Also, many pitched roofs have a better appearance than flat roofs.  But many home owners do not consider the pitch of the roof and the type of tile.  In many cases the pitch is determined by the size of the extension and the position of any upper windows. In some cases there may only be sufficient height for a relatively low pitched roof.

Each type of tile has a minimum pitch for it to be watertight, ie, roofs below the minimum pitch for the type of tile may not be watertight.  For instance, Redland 50 Double Roman tiles should be used at minimum pitches of 17.5, 22.5 or 30 degrees depending on whether the tiles are through coloured or have a granular finish, and also depending on headlap.  Therefore, if a pitched roof has a low pitch it is possible that it may not be watertight unless a suitable type of tile has been used such as Forticrete Centurion which can be used for pitches as low as 10 or 12.5 degrees depending on headlap, lap of underlay, etc.

 

The list above is for general advice and is not exhaustive as further issues may require investigation and enquiries, depending on the property you propose to buy.

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