Valuations

It may be necessary for an RICS-registered valuer to carry out a “Red Book” property valuation for the following reasons:

1. ‍Probate or Inheritance: valuations may be needed in Last Will scenarios and the inheritance tax associated with these.‍
2. Capital Gains Tax: this is tax on the increase in property value since ownership. It is equal to 28% on the gain from residential property and 20% on other assets. A valuation will need to be submitted to HMRC or the District Valuer in relation to circumstances relating to property gifts, under-valued sales (to benefit the buyer), inheritance, assets acquired before 1982, etc.‍
3. Property Dispute: such valuations help resolve property-related disagreements.‍
4. Charities: a property is being sold exclusively for a charity and therefore needs a market valuation in accordance with section 119 of Charities Act 2011.‍
5. Shared Ownership & Purchase of Social Housing: valuations for shared ownership transactions and social housing (Right to Buy) purchases.‍
6. Divorce: valuations are commonly used in divorce proceedings to assess how much capital is apportioned between the parties.‍
7. Bank, Insurance or Mortgage: in a bid to secure finance or insurance, the bank or insurance provider will need a valuation conducted.‍
8. Pension: this includes the transfer of an asset into a Self-Invested Personal Pension (SIPP).‍
9. Dissolution of Partnerships (incl. Asset-Backed Companies): valuations may be required in liquidation scenarios.‍
10. Compulsory Purchase Orders (CPO): a valuation will be needed to ascertain how much the council will purchase your property for.
    

Institutional lenders, HMRC, accountants or solicitors may require Red Book valuations, which our panel of surveyors can provide in a bid to ensure you adhere to correct procedures and withstand scrutiny in various official and legal contexts.

Your surveyor determines the market value of your property on your behalf (or your lender’s).

The valuation report describes the price of your house or flat. This can help you determine whether the sale price is accurate or if you should renegotiate.

Sometimes, a desktop valuation can be done for new build properties that are unfinished and this will be based on photos, drawings and specifications.

A valuer will visit your property in person and, after the physical inspection of the site, they will research similar properties in the area to obtain “comparables”.

For commercial properties, desktop valuations may be performed periodically after the initial site visit and which can be more cost-effective, provided there is not structural change.

Data is gathered from the property and the local area such as its condition and measurements.

Sale prices of similar properties are researched and any planning restrictions, land zoning or upcoming projects are investigated in order to establish an accurate property value.

Yes. A valuation is not the same as a building survey. The latter focuses on assessing the structural build and condition of the property, which might affect the value accordingly. It is therefore advisable to commission both.

This is issued by RICS as a set of standards for conducting valuations. It required that surveyors provide clear information about their methodology, assumptions and sources of data in ascertaining property value. It is a protocol in determining values and which complies with legal and regulatory requirements, particularly those relating to accounting and tax.

The most recent global edition of the RICS Valuation Global Standards, often referred to as RICS “Red Book Global Standards”, contains updates from the International Valuation Standards (IVS) 2017 and aligns with advancements in ethics and measurement at an international standard.

You should ordinarily do this before the lender approves the mortgage application. In this way, you can prove to the bank that the amount you intend to borrow matches the property value, which is particularly relevant if the bank has outstanding debts to recover. The bank needs to ensure that the collateral is sufficient in relation to the amount they are lending to you. Other scenarios requiring a valuation include probate or divorce proceedings, for example.

No. Estate agents will provide you with their own estimates of how much your property can go for and these figures may be inflated to win business from you, because their interest is in earning commission.

Even though there are reputable agents who do provide good local information and what they believe to be a true figure in respect of how much they think they can sell your home for, they will not have conducted the same level of research as an RICS-Registered Valuer who collects and analyses the relevant evidence.

A property may need to be valued if a family member or friend has passed away in order to calculate the Inheritance Tax Liability (IHT) associated with the estate. The valuation must be in line with RICS Valuation Professional Standards (Red Book) to be deemed as a true market value and withstand the District Valuer’s scrutiny.

If spouses separate, then assets such as the family home and any other property will need to be valued before they get fairly/lawfully apportioned.

A chartered surveyor may be instructed as a Single Joint Expert, meaning that they are appointed to represent both parties. The valuer will be acting as an expert witness under part 35 of the Civil Procedure Rules and will therefore need to abide by the RICS Valuation Professional Standards (Red Book).

A property may have been purchased under a government loan scheme and so the valuation will be required if the owner intends to buy more shares of the same (known as “staircasing”) or sell the property. Therefore, an RICS valuer will be instructed in line with the requirements of the Housing Association or other scheme provider.

Every leaseholder of Shared Ownership properties possesses the right to purchase additional shares in their residence, known as “staircasing”. The value of shares will reflect the valuation of the property. So, if you own 50% of a £500,000 property and you wish to buy the remaining shares, then the price will come to £250,000.

You may require funding to purchase shares. Instruct a solicitor of your own to act in your interests, rather than using the mortgage lender’s. Then, have your solicitor send the instruction form and a copy of your lease to the housing association, the latter of which can be obtained from the Land Registry. The valuation tends to remain valid for 3 months, so you will need to act promptly after the survey.

Help to Buy was a shared equity scheme introduced by the government and interest free for 5 years. Buyers were allowed to obtain a government loan of 40% of the property’s value and a mortgage of 55%. A 5% deposit was all that was required from you.

On selling the property, the government receives 40% of the equity. So, if you bought a property for £500,000 and sold it for £600,000, then the government receives, £40,000 and you receive £60,000.

The last Help to Buy scheme has since ended in 2023, however. You may still need an equity valuation, though. Help to Buy redemption was introduced for buyers to pay back the loan without needing to sell their property and the valuation report would need to be supplied to the Homes and Communities Agency (HCA): https://www.gov.uk/government/collections/manage-your-help-to-buy-equity-loan

Selling on the open market will attract a host of possible buyers if the price is within their budget. Therefore, you will want to find out exactly what you should put your property on the market for.

Trusting a surveyor’s valuations is preferred over simply using the estate agent’s figures. An agent may purposefully convince you that the property is worth more in order to win the instruction for commission reasons. As a result, you do not want the property being marketed at too high a price and then going “stale”, after which period you will be pressured to reduce the sale price anyway.

The Right to Buy scheme allows you as a tenant to purchase your council or housing association residence at a discounted price. You should verify your landlord’s valuation by instructing your own independent valuation, which will help you establish the true value of your home under Right to Buy.

The Annual Tax on Enveloped Dwellings (ATED) is annual tax that mainly affects businesses which own properties in the UK worth over £500,000. You should endeavour to get a valuation and pay the correct amount promptly to avoid hefty fines or you can challenge valuations with the District Valuer if necessary. Properties excluded from this tax category are guest houses, hotels, school/student/military housing, hospitals, prisons and care facilities.

What you need to pay is described here: https://www.gov.uk/guidance/annual-tax-on-enveloped-dwellings-the-basics#what-you-need-to-pay

This relates to the sale of your UK property whilst residing outside the UK and navigating the associated tax requirements.

You will need to pay tax on any income derived from the UK, even if you do not live there. A non-domicile tax valuation provides essential information to you and your legal advisors by outlining what you are required to pay.

This may be needed if you purchased a property before 1982 in order to calculate Capital Gains Tax (CGT). So, the valuer needs to determine the value of the property when it was bought in comparison to present market value.