Independent Valuation Report
17/10/2022
(Last Updated: 21/09/2023)
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Independent valuation reports are undertaken by surveyors who are qualified and regulated by the Royal Institution of Chartered Surveyors (RICS).
They are impartial (independent) and so they value the property fairly without a bias to either party.
There are a number of different reasons to value your property which include:
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Each of the above is an independent valuation report that a RICS surveyor can provide for you, however the format and calculations vary depending on the reason for getting the survey. This article examines each different type of property valuation survey.
Can you get an independent valuation on a property?
When buying with a mortgage, your lender will appoint their own surveyor for a mortgage valuation.
This is done for the lender, but it is usually paid for by the borrower. You can, however, order an independent valuation report. This will allow you to compare results and also give you an insight into the condition of the property from a buyer's perspective.
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How is the independent valuation report calculated?
- 1
Divorce Settlement
The transfer of a property, as part of a divorce settlement, will require the married couple to get an independent valuation report in order to assess the current market value of the property. However, if the divorcing couple chooses to sell the property, a local estate agent will be instructed to seek a buyer.
When performing a valuation, a chartered surveyor attends the property and assesses its current condition.
Subsequently, they provide their opinion of what the estimated price is and provide examples of comparable properties which have sold in the local area, to support how they have arrived at their valuation.
- 2
Transferring a share in your property
Transferring a share in a property is commonly known as a Transfer of Equity transaction. Current owners can either be adding someone to or removing someone from the title deeds.
If there is a mortgage on the property, the current owners should always seek approval from their lender prior to instructing a RICS surveyor or solicitor. If the mortgage lender does not agree to the ownership changes, then the transaction may not be able to take place.
Depending on the circumstances and whether any money (usually referred to as consideration) is changing hands as part of the transaction, an independent assessment of the current market value of the property may be appropriate.
If the property share is being transferred with no money changing hands then the independent valuation report may not be necessary.
- 3
Staircasing for housing association
The rules governing Shared Ownership stipulate that a property valuation is carried out by an independent RICS surveyor in order to assess the current valuation of the property so that the cost of buying an increased share can be determined.
The chartered surveyor's valuation is used to set the cost of purchase of the increased share from the housing association. The RICS property valuation does not replace the mortgage valuation which will be required by a lender if a mortgage is being used to fund the transaction.
Housing associations insist on the valuation being carried out within three months of completion of the staircasing process. Many surveyors offer a single free desktop rewriting service in the event that the legal work takes longer than this restrictive time frame.
- 4
Sale of shared ownership property
When selling a Shared Ownership property, the terms of the lease stipulate that the vendor must get an independent valuation report. This will determine the amount of money which will be paid to the vendor as part of their sale.
The RICS property valuation is submitted to the housing association and forms part of the contract pack for sale. In addition to that, a housing association will require the valuation to be no older than three months at the point of completion of the process.
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- 5
Leasehold Valuation
When looking to extend the lease of a leasehold property, a premium will be payable to the freeholder. This is calculated through a valuation report and it is estimated by adding:
- An additional 90 years to the current lease, and
- A peppercorn ground rent
The leaseholder provides the surveyor with a copy of current lease and the chartered surveyor then attends the property to assess its current condition. The valuation is conducted in accordance with the 1993 Leasehold Reform Act.
The report is delivered on the surveyors letter head. This valuation is submitted by the leaseholder to their solicitor along with a copy of their lease in order for the solicitor to draft the section 42 notice which begins the formal extension process
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Freehold Valuation
When looking to purchase the freehold of a block of flats, a chartered surveyor will need to carry out an assessment of value which will form part of the statutory notice to be submitted by the solicitor.
In order to be able to provide you with the property valuation report, the surveyor will need:
- a copy of each individual lease for the flats
- an estimate of value per property
- access to each flat as part of his inspection
Once the surveyor has carried out his site visit he will need to complete a complex calculation based on the lease information, local knowledge and property condition to determine the freehold value to be submitted as part of the section 13 notice by the leaseholders to the freeholder.
- 7
Probate Valuation
A probate valuation will be a necessary step in the probate process and will be carried out by a chartered surveyor.
The valuation will be carried out to assess what the market valuation of the property was on the date indicated on the death certificate.
To support the conclusions, the report will include comparable local properties which have been sold within three months of the time of death. It will need to be submitted to the courts to finalise the Grant of Probate process.
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Help to Buy Repayment Valuation
When you want to repay your loan, the equity loan companies require you to get a Help to Buy valuation of your property's current market value.
The report needs to be drafted in a specific way by a RICS surveyor. Our Help to Buy surveyors are accepted by Target.
If you are still unsure about whether or not you need to get a valuation report, you can always get in touch with us. A member of our team can answer your questions and advise you on the best curse of action.
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Written by:
Andrew Boast
Andrew started his career in 2000 working within conveyancing solicitor firms and grew hands on knowledge of a wide variety of conveyancing challenges and solutions. After helping in excess of 50,000 clients in his career, he uses all this experience within his article writing for SAM, mainstream media and his self published book How to Buy a House Without Killing Anyone.
Reviewed by:
Caragh Bailey
Caragh is an excellent writer in her own right as well as an accomplished copy editor for both fiction and non-fiction books, news articles and editorials. She has written extensively for SAM for a variety of conveyancing, survey and mortgage related articles.
