Right to Buy Valuation

sho_me_da_money

Quick one.

If the initial RTB valuation comes in and is comprised based on the last sale price of a property that has been termed 'freehold' in the same area, is that a fair approach to valuation?

The 'freehold' house has been sold about three times since it was bought under the RTB scheme by the original owners and I always feel the value of the 'freehold' property is way higher than say the houses owned by the council on the same street.

Figured I'd ask because I'm going through the RTB and wanted a fair evaluation on the property I am applying for.

I know if I felt the price was unfair Il can appoint a DV but since I don't know how valuations are done e.g. freehold property sale.prices Vs leasehold property sale prices, does it even make a.difference, how could I do my own research, should I go to a local estate agent etc..

I basically wanted to do all I could before making a decision to appoint a DV and risk the price coming back higher than the original offer

Cakeguts

Are you saying that the property that you want to buy is leasehold and that you are only buying a lease from the council? So your property won't be freehold when you buy it?



If you are buying a house that means that you are buying a leasehold house from the council? Many leaseholds are flats.

sevenhills

sho_me_da_money wrote: »

If the initial RTB valuation comes in and is comprised based on the last sale price of a property that has been termed 'freehold' in the same area, is that a fair approach to valuation?

When I bought my council house, I was surprised how low the valuation was.
It was valued as a basic house without a shower etc, as opposed to a house made much better by small improvements.
The valuation was 100,000 yet next door sold for 107,000 the previous year.

sho_me_da_money

Useful to know and thank you both for responding.

da_rule

Why do you think your house will be sold as leasehold if the others are freehold?

lincroft1710

You do not "appoint a DV".

If you write to your landlord saying you disagree with their valuation, then your landlord must refer the matter to the District Valuer. You are correct in saying the DV's valuation may be higher than the landlord's but from experience this rarely occurs.

Hayley20013

If you are buying a house and not a flat, it should be freehold. Ask the council if the property will be freehold. We recently bought ours from the council, they valued it too high in my opinion and went on the last house sold in the street that was the same size to get their valuation. We disputed and they sent the district valuer (you don’t pay anything for this) he took £25,000 off the price the council had said.

Hayley20013

Freehold means you own the house and the land it’s built on, it doesn’t matter if it’s the council that sell you it or a private seller.

sho_me_da_money

Thank you all. Sorry for the late response but I do want to personally thank you for your time and support here. Very much appreciated.

Sevenhills/Hayley - that is really encouraging to know that your RTB was valued lower. On the flip side, I have heard of stories where houses were valued way over. If I dont agree with the valuation, I may ask them to instruct a DV but i know the risk here in that the whatever the DV says is final. One thing i was thinking of

1. Let the council send out the initial surveyor and value the property. Apparently once the surveyor is done, they wont tell me what its worth but they will communicate that valuation back to the council directly who in turn I will give me the actual offer. I dont like this part - it stinks - why would telling me the worth of the property after they are done not be allowed? It stinks.

2. If the valuation is way over (and I will base that of historic prices of houses in the same area including land registry records), then I might appoint a RICs certified surveyor for around 300GBP. This might help me recognise how far out, near or accurate the original surveying company is.

3. Depending on (2), I will then either accept the offer OR reject it and have them instruct a DV. I am told the DV will go through everything including asking me why i think the property should be worth lower. At this point i would use the publicly available information (historic sale prices) AND the private RICs certified surveyors report.

I am just mitigating the risk of the DV valuing the property higher. I think the 300GBP is worth it.

When you did your RTB - what type of things did they take into account to further reduce the valuation of your property? The RTB form asks to list a bunch of items you have paid for yourself and considering ive been in this property since 1985 - theres a ton of things that have been done since then. I doubt that regular maintenance such as gardening, painting etc. will count? But perhaps having works done like paving a small area outside, installing a fireplace, installing a laminate floor and having labourers strip down a shed load of woodchip and replaster may count?

Hayley - getting 25K off from the DV is massive!! Curiously, I am wondering how or why the DV valued it that much less than the council surveyor? Isnt the "last house price" sale in the given area not a bulletproof way for them to value it the same price? Obviously not in your case so well done! Just curious how/what the DV saw that brought it down by a whopping 25k?

Id be grateful for any support you or any other members may have with regards to my comments.

Much appreciated.

da_rule

There’s a number of reasons the valued won’t share the information directly with you:
1) You’re not their client, the Council is, therefore professionally they report to their client only and their professional liability insurance would also be unlikely to cover them if they dealt with you directly;
2) Visiting the property is only 1 stage in the valuation process, therefore they may not have the value at the time of the visit;
3) The open market value needs to have the discount applied and any other deductions applied before it forms the offer made to you.

In terms of things you have paid for, these have to be ‘tenants improvements’. Therefore general maintenance and upkeep is not covered. It would therefore only be the value of things that you have purchased or works you have carried out that have resulted in an increase to the property value.

It is worth noting that it is the increase in value, not the cost of the works, that is disregarded. For example, if you paid £15,000 for a new kitchen but it only added £10,000 to the house value then the £10,000 would be disregarded. But, conversely the opposite would also be true, so if a £10,000 kitchen added £15,000 in value, the £15,000 would be disregarded.

Also, it is based on the valuation date, so if you upgraded the kitchen 10 years ago then this is unlikely to still have any impact on the valuation or give rise to any disregard.

Norman_Castle

sho_me_da_money wrote: »

1. Let the council send out the initial surveyor and value the property. Apparently once the surveyor is done, they wont tell me what its worth but they will communicate that valuation back to the council directly who in turn I will give me the actual offer. I dont like this part - it stinks - why would telling me the worth of the property after they are done not be allowed? It stinks.

As above, you're not their client and they wont know the price until comparing it to others. The visit is to asses it, not to value it. They also wont want to waste time arguing the price with tenants who often have no idea of value and have obvious reason to lower the price. The surveyors aren't there to barter.