Shared ownership equity valuation

How Do Shared Ownership Valuations Work?

With house prices soaring, many young people and those who earn low incomes fear that they might never be able to own their own home. Shared ownership has been introduced as a potential solution to the housing crisis in Britain. In September 2020, the Government announced that there would be over £12bn provided in funding for affordable housing, and this is expected to deliver up to 180,000 affordable properties. At the heart of the promise is the shared ownership model, which provides eligible tenants in new housing association properties the automatic right to purchase a share in the home that they rent.

What is Shared Ownership:

Shared ownership is a scheme that is referred to as ‘part buy, part rent’ and is designed for people who would otherwise struggle to afford a full mortgage. It works by allowing tenants to purchase a share of their property, typically between 25-75%, and pay rent on the rest. When tenants are able to afford to, they can increase the size of their share until they own 100% of the property; a process known as staircasing.

This new model of buying a home is designed to reduce the amount needed for a deposit and the monthly payments can often be cheaper compared to private renting or full ownership. Currently, around 157,000 households are living in shared ownership homes in England and the demand for them is increasing, particularly in areas like London where affordability is lowest. From April 1, 2021, the Government has pledged to make getting a shared ownership home even easier by reducing the minimum initial share from 25% to 10% and allowing additional shares to be bought in increments of 1%.

Who is Eligible for Shared Ownership:

In England, a household can purchase some of their property through the shared ownership scheme if the combined household income is £80,000 or less annually, or £90,000 or less per year if living in London. Buyers should also be first-time buyers, or in a situation where they used to own their own home but can no longer afford to. You can also purchase using the shared ownership scheme if you are an existing shared owner and looking to move to a different property. Most buyers will take out a mortgage to pay for their share of the home’s purchase price, while others will use savings to fund it. Most shared ownership schemes are run by housing associations, and the properties are always leasehold, meaning the housing association still owns the land the house is built on.

Shared ownership equity valuation

 How Does a Shared Ownership Valuation Work?

In most cases, a shared ownership property will be valued by a surveyor that is registered with the Royal Institute of Chartered Surveyors (RICS). In some cases, the surveyor may visit the property to make the valuation and perform an internal and external inspection. They may also consider the sale price of three similar properties in the area to determine the market valuation of the property.

Independent home buyers survey

Shared Equity Valuation When Buying More Shares:

If you already own a share of a shared ownership home but want to increase the amount that you own, you will have to get another valuation carried out each time you go up in the staircasing process. Some shared ownership providers will ask you to use a surveyor that has been pre-approved by them, but others will allow you to choose your own surveyor as long as they are registered with the RICS.

You will be required to pay the full fee for the valuation. The valuation will be used by the shared ownership provider to determine the value of the property, and you may need to pay for an additional valuation for your mortgage provider if you are planning to apply for an increased mortgage to purchase an additional share in the property.

How to Deal With Shared Ownership Valuation Problems:

If you do not agree with the valuation of your shared ownership property, you will need to initially discuss your concerns with the surveyor. To do this, you will need to provide evidence to support why you think that the valuation is not correct. This will usually be in the form of sales prices of similar properties in the area. Your shared ownership provider will also have an appeals process that you can use if you do not agree with the valuation. However, the decision of the appeals process is final, and it’s important to bear in mind that it may result in the valuation of the property going either up or down. The valuation report that you will receive from the surveyor will typically include an open market valuation, which is the price that your surveyor expects the property would sell for on the open market. If you have already moved into the property, you will also get a valuation that excludes any significant improvements that you have made. Bear in mind that most shared ownership providers will require that you inform them about any planned improvements to the property before starting the work.

Types of House Survey

If you Want to Sell Your Share:

If you want to sell your share of a shared ownership property, the valuation is similar to the process of getting a valuation to staircase in the property. However, there are some key differences and additional factors to take into account if you want to sell your share.

When you are ready to sell your share of a shared ownership home, the first thing to do is inform your shared ownership provider and arrange a valuation by a surveyor. The provider will then use the open market calculation to determine how much your share and their share of the property are worth. This valuation is normally valid for three months. However, getting a valuation does not mean that you are obliged to sell the home. You will need to sign a contract if you decide to proceed with selling your share of the property. Typically, you will be required to give your shared ownership provider the opportunity to sell your share of the property before putting it on the open market. This can sometimes apply even if you own 100% of the property. Even if you agree on a sale price that is below the valuation, the shared ownership provider will retain their share of the property based on the valuation.

Since getting a valuation can take time, it’s important to speak to your shared ownership provider as soon as possible if you are considering staircasing or if you want to sell your share.

How to Find Shared Ownership Valuation Surveyors:

If you want to staircase in your shared ownership home or are thinking of selling your share of the property, you will need to arrange to have a valuation carried out by a surveyor. It is important to first check with your shared ownership provider since some providers will require that you arrange for a surveyor that they have pre-approved to carry out the work. Others will provide you with a list of surveyors to choose from, while some providers are happy to let you choose your own surveyor, as long as they are RICS registered.

How to find a good property surveyor

There are several ways to find a suitable surveyor to carry out the valuation of your shared ownership property. For most shared ownership homeowners, their shared ownership provider is usually the first point of call. However, you may also want to consider asking family and friends for personal recommendations. If you are purchasing your shared ownership home with a mortgage, you may want to use a surveyor that is recommended by your mortgage provider, although bear in mind that this might affect your mortgage offer. You can also use local listings or comparison websites to find suitable surveyors.

Surveyors range from independent contractors to large companies. If you are in a position to choose your own surveyor, the most important step is ensuring that they are registered with an industry body such as the RICS, which is usually the minimum required by your shared ownership provider. Some things to consider when choosing a surveyor include:

Type of Survey:

Consider the type of survey that you will need to provide you with the information that you need. When staircasing or selling your share of a shared ownership property, you will usually only need to get a basic valuation survey carried out. However, check with your shared ownership provider if you suspect that you may need a homebuyer’s survey or structural survey.

Local Knowledge:

Ideally, you should look for a surveyor that has a good knowledge of the local area and the properties within it. You may also want to consider using a surveyor that specialises in shared ownership property valuations.


It’s always worth considering the price when choosing a surveyor. You may want to organise several quotations before choosing a surveyor as they can vary a lot.

Shared ownership has provided many first-time buyers with more opportunities to get their foot on the property ladder. If you are considering purchasing a shared ownership property, staircasing, or selling a share that you already own, you will need to arrange a valuation.