Shared ownership schemes provide an accessible route onto the property ladder. However, when selling your share, staircasing, or extending a lease, a compliant and independent market valuation is a mandatory requirement.
For leaseholders, housing associations and solicitors, instructing experienced RICS Registered Valuers, including specialist residential Valuers, ensures that any shared ownership valuation is prepared correctly, complies with housing association requirements, and is capable of withstanding scrutiny.
What Is Shared Ownership?
Shared ownership allows a buyer to purchase a percentage share of a property (commonly between 25% and 75%) and pay rent on the remaining share to a housing association.
Over time, leaseholders may:
– Sell their share
– Increase their ownership percentage (staircasing)
– Staircase to 100% ownership
– Extend their lease
In each of these situations, a formal shared ownership valuation is required.
Why Is a Market Valuation Required?
Housing associations require an independent market valuation to:
– Determine the current full market value of the property
– Calculate the value of the share being sold or purchased
– Ensure fairness between the leaseholder and the association
– Prevent under- or over-valuation
The percentage share is then applied to the full market valuation figure to calculate the transaction price.
For example, if the full market value is £400,000 and you own 50%, the value of your share is £200,000.
When Is a Shared Ownership Valuation Required?
A professional shared ownership valuation is typically required for:
1. Staircasing – When purchasing additional shares, the price paid is based on the current market valuation, not the original purchase price.
2. Selling Your Share – When selling, the housing association will use the independent market valuation to set the asking price during the nomination period.
3. Lease Extensions – In some cases, extending the lease may require a formal market valuation.
4. Remortgaging – Some lenders require a RICS-compliant valuation when refinancing a shared ownership property.
What Are the Valuation Requirements?
Most housing associations require that:
– The valuation is carried out by a RICS Registered Valuer
– The valuer is independent and has no conflict of interest
– The report is a formal Red Book compliant market valuation
– The valuation is valid for a limited period (commonly 3 months)
– The valuer has experience in shared ownership property
An estate agent’s appraisal is not sufficient for shared ownership purposes.
What Is Market Value?
Under RICS Valuation – Global Standards (Red Book), market value is defined as:
“The estimated amount for which an asset should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.”
For a shared ownership valuation, the full open market value of the property is assessed as if sold on the open market with vacant possession (unless otherwise specified in the lease).
How Residential Valuers Assess Shared Ownership Properties
Experienced residential Valuers will consider:
– Comparable sales evidence of similar properties
– Location and local market demand
– Size and layout
– Condition and specification
– Floor area measurements
– Any improvements carried out (subject to lease terms)
The result is an objective and evidence-based market valuation suitable for housing association approval.
Improvements and Value Adjustments
If a leaseholder has carried out improvements (for example, a new kitchen or extension), some housing associations allow the value of approved improvements to be excluded from the shared ownership calculation.
Experienced RICS Registered Valuers will clarify:
– Whether improvements are to be disregarded
– How the lease wording affects valuation
– Whether documentary evidence is required
This ensures the shared ownership valuation reflects the correct basis under the lease.
What Happens If the Valuation Is Challenged?
Housing associations may review the valuation. If concerns arise, they may request clarification or evidence.
A professionally prepared market valuation by experienced residential Valuers with detailed comparable evidence significantly reduces the likelihood of dispute.
Validity Period of a Shared Ownership Valuation
Most housing associations require that a shared ownership valuation is valid for 3 months. If the transaction does not complete within this period, a refreshed or updated market valuation may be required.
Timely instruction of a RICS Registered Valuer helps avoid delays.
Risks of Informal Valuations
Relying on informal advice can lead to:
– Rejection by the housing association
– Delays in staircasing or sale
– Incorrect pricing
– Financial disputes
A formal shared ownership valuation prepared by qualified residential Valuers ensures compliance and transaction certainty.
Our Shared Ownership Valuation Services
We provide:
– RICS Red Book compliant shared ownership valuation reports
– Staircasing valuations
– Sale valuations
– Lease extension valuation advice
– Fast turnaround times and transparent fees
All reports are prepared by experienced RICS Registered Valuers and specialist residential Valuers, ensuring compliance with housing association requirements and professional standards.
Speak to Our RICS Registered Valuers If you require an accurate and compliant shared ownership valuation, or independent market valuation advice, our experienced team of residential Valuers are here to assist.
Contact us today to ensure your shared ownership transaction proceeds smoothly and in full compliance with scheme requirements.
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