Shared Ownership Valuation

You have to get a shared ownership valuation when you are either selling your property or staircasing, which is buying a larger share in it. The staircasing valuation is essentially the same as the shared ownership valuation but simply for the different purpose.

Your housing association can organise it or they will ask you to, but you will always have to pay for the RICS valuation shared ownership. You must do this to determine how much the next share will cost you (for staircasing) or what price your property – and your stake in the property – will be sold for.

How do you value shared ownership?

You instruct an experienced RICS valuer to carry out the work. They will provide a current market valuation by doing a site visit and assessing the condition of the property for valuing purposes only. The surveyor also provides comparables of similar, recently sold properties and types (if available) and delivers the valuation report on RICS-headed paper.

The valuation is not a home buyers survey and does not consider property defects.

How reliable is a RICS valuation?

RICS valuations are reliable as they are carried out by accredited surveyors independent to your property or the housing association. To make sure the valuation is reliable and the property value is accurate, the housing association require the report to be:

• Provided by a Qualified RICS valuer
• Reported on RICS headed paper
• Independent to you
• Provided with comparables (where available)

How long does the co-ownership valuation last for?

The shared ownership valuation is only valid for three months, after which, if you still want to staircase or sell, you must, unfortunately, pay for a new one.

If you're staircasing with a newer lease and only purchasing 1%, you don't need a valuation report at all, as the value of your purchase is too small already.

Shared Ownership Valuation Problems

If you or the housing association disagree with the final figure, you can challenge the shared ownership valuation report. You will, however, need to provide evidence, perhaps 3 comparables of similar properties that have sold within the last 3 months in the area. Use our house offer calculator to get an idea of what the property should be worth.

Shared ownership valuation problems can cause delays with your sale or staircasing process, so make sure you choose an experienced RICS surveyor to prevent this from happening.

Staircasing - does my valuation affect stamp duty?

With shared ownership, you can opt to pay stamp duty for the whole value of the property. This is done when you first purchase the shared ownership house and is known as a "market value election". As shared ownership is popular with first time buyers, it might be worth opting for this as you'll be able to benefit from the stamp duty shared ownership first-time buyer relief. In addition, your property could grow in value and you might end up paying more once you staircase**.

You can also pay stamp duty, if applicable, on the first share you bought and then don’t have to pay any more until you reach more than an 80% share of the property.

If you get a RICS valuation shared ownership, you only attract stamp duty if you staircase to more than 80%. Read more - Stamp Duty Land Tax for Staircasing.

Is it more difficult to sell a shared ownership property?

When selling a shared ownership property, the housing association will probably have a right to try and find a buyer first. You will most likely have to pay an assignment fee - this is charged by the housing association when the property is transferred in a different name. It usually ranges between 1% and 1.5% of the total value of the property.

If no one can afford your property, or it doesn't sell during a set time stated within your lease agreement, then you can sell your property on the open market. While it doesn't make it more difficult, having to give the housing association time to find a buyer first will delay your sale by several weeks. Most leases state 4, 8 or 12 weeks, so carefully read the terms of your lease.

This doesn't apply if a party named on the lease dies or if there's a court order in place asking you to sell.

Can I negotiate on shared ownership?

Individual housing associations differ in policy on whether you can accept offers above or below the valuation figure and what happens if you do.

We've been made aware that some housing associations allow you to accept offers higher than the RICS valuation shared ownership figure but then expect to be paid a percentage of that excess according to the share you don't own.

Say, for example, you agree to an offer which is £10,000 above the valuation figure, and you own a 50% share, then you get £5,000 of the £10,000 excess, and the housing association gets the other £5,000.

You should carefully check your lease for information about your housing association's individual selling/reselling policy and consult it if you're unsure and still have questions.