To Staircase or Not (Shared Ownership)

RichyRich

Shenl0101 wrote: »

You don't have to use the HA's valuer but they are RICS and therefore are not going to give a value to benefit the HA - it's total rubbish to think that and you can just offer your own RICS valuation if you felt like it anyway.

Your comment is predicated on the misapprehension that there is one single true valuation for any property. The role of the valuer in a shared ownership staircase is to ascertain the value that a property might reasonably be expected to achieve were it to be sold on the open market. As we all know, there is a band within which those values may fall — a property might achieve anywhere between £240k and £270k, for example. The key to getting good value on a S.O. staircase is in obtaining such a valuation as far toward the bottom end of that valuation as possible.

It is perfectly possible that two entirely independent RICSS surveyors might proffer values £30k apart. All I am saying is that what we were told by our solicitor is that independently instructed valuations through surveyors not on the HA's panel tend to be lower than those instructed through the HA's preferred valuers.

In our case, we obtained a valuation to purchase through a RICS accredited surveyor that was £90k less than the valuation that the RICS accredited surveyor appointed by our mortgage lender provided.

'Total rubbish' that you won't get a worse price from some surveyors than others? You decide!

mzeep

The right of first refusal doesn't exist anymore for Shared Ownership leases that not subject to local authority restrictions in certain rural areas. This was abolished across the board earlier this year.

You're correct. However, the pre-emption right that was included in earlier versions of the shared ownership lease needs to be removed to enable this. The HCA has introduced a standard deed of variation, so I would like to think the legal fees would not be too high.

mzeep

Only you know what you can afford and nobody can predict the future of the housing market.

I have worked out that I can afford to stretch myself to pay for the additional borrowing required to staircase to 100%. I have therefore looked at the impact the market value in 5 years time would have on my equity if I remained at 75% and if I staircased to 100%. Perhaps my calculation is too simplistic:

Assumed market value of share in year 5, less mortgage balance in year 5 = equity if sold in year 5. For the 75% share calculation, I have also included the cumulative saving in mortgage payments over the 5 year period (assuming I put this into a savings account).

Using the above calculation, I have worked out what the equity would be if the market value stays the same as the current valuation, goes down and goes up. Unless the property increases in value further, then I will actually be worse off financially (due to the saving I would have made on the mortgage payments).

Does this make sense?