Shared Ownership Valuation

Hamiltoes_2

Hi all,

I've lurked these threads for ages now but I've found myself in a bit of a pickle and registered to see if anyone can help with some advice.

Basically in Autumn last year a relative purchased a 25% share in a re-sale shared ownership property. The property was built around 2005/2006 and sold then for £22,500. It was on the market in Aug 2014 for offers over £32,000.

Relative obtained home report which valued property at £105,000, (we are in Scotland so can't sell without one and lenders use these when making mortgage descsions) and in the notes something along the lines of "it is understood the property forms part of a shared ownership scheme and that 25% of the property is to be sold on the open market, we put the 25% valuation in the region of £30,000-£35,000 Pounds sterling.

Now of course I know that 25% of £105,000 isn't £30/£35k, however we did some research and houses in the street had been selling at £30+ for 25% so we just thought thats how they were being valued these days- i.e slightly higher than what the exact 25% would be and the valuation was taking into account that these would be quite desirable and open to a wider range of purchasers etc.

So relative paid cash, however could not move in due to an accident which means she could not access the property. I moved in with my kids and put my house on the market with the plan of buying this shared ownership property from relative. My property has sold however i now cannot seem to get a mortgage for the £30k+ my relative paid!? I had a meeting with Nationwide and everything went really positive, 2 phone calls and 45mins into the meeting it was like the penny dropped and he said, but £33k isn't 25% of £105k?? I said well I know but thats the valuation on the (admittedly slightly outdated) home report.

So I am to go away and get the property valued by an estate agent, come back and start the mortgage application with a realistic sale price. He said the market has gone up so I might get the £33k valuation but that would make the property value about £130k and theres no way its gone up that much!! I'm at a loss, i really want to buy this place and feel £33k is a bargain, 3 other properties have sold in the past year for this price.

Does anyone know if this is the done thing when valuing properties or has my relative had a terrible valuation? It was on a mortgage valuation too!! I'm very confused and would appreciate any advice. Thanks

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this seems that the valuation your relative had done was overvalued (and then also by their lender). I've never heard of shared ownership valuations being carried out like this. All our valuations for shared ownership (I work for a HA) are just a percentage of the full market value. I guess your options now are to use the lender your relative did if they calculate valuation in a different way or to hope the price has increased enough for to cover the usual valuation with current lender .