Property Valuations Guide
So which one do you want and what are the differences?
- A probate valuation is a valuation of the property for use in the declaration by the executor handling the tax side of the estate with HMRC. The valuation of the property estate has to be submitted by law and this is reviewed by the Valuation Office for HMRC. The value will reflect potential taxable gain and this often means planning permission. The Valuation Office will challenge the probate figure if they consider it to be too high or too low. So this means your estate agent needs to be experienced and or suitably qualified to give this advice. Note: we recently dealt with a client who was badly advised by an agent and so paid £8,000 too much in tax! In another example of a property sitting in one acre, no less than eight high street estate agents had valued the property for £280-320,000. We valued it at £600,000 as development site!
- A matrimonial valuation is a valuation used by both parties in a divorce as part of the settlement calculation and as such can easily be challenged by the ‘other side’. This may well mean the valuer has to attend court to justify, under cross-examination, the figure quoted. Thus, the evidence base used must be robust and accurate and the valuer must be clear as to the facts surrounding the valuation.
- A market appraisal is where a homeowner is thinking of selling their home and wants advice on how best to market the property to get the highest price from the best buyer. Often starting high and coming down through a process of sales negotiation. This requires marketing expertise and experience. It is usually free of charge on the basis the property is being put up for sale imminently.
- An insurance valuation is a calculation of the cost of rebuilding all or part of the building(s) on the site in the event of some disaster. There is a cost index which relates to building costs which is adjusted quarterly and in common use by professionals in the industry. The land is still ‘owned’ so it is the cost of clearing the site after the disaster, getting new plans produced and approved and the property rebuilt.
- A planning uplift valuation is the calculation as specified in the option or promotion agreement of the valuation of the uplifted value of land with planning permission, the planning use and definitions used are critical. Deductions for planning promotion costs, s106 or CIL are also fundamental.
- Court of protection valuations are similar to matrimonial valuations but may take into consideration future expectations of value over a prescribed period of time and will reflect the circumstances of the given situation. This may be at the direction of the court.
- Professional valuations are for some specific purpose, for example, the valuation of a property for a business reason, often for inclusion in a pension scheme.
- Mortgage valuations are very often misunderstood, as although the borrower usually pays for valuation it is for the benefit of the lender. Lenders do not have to disclose them, although it is usual that they do provide a copy to the borrower. Mainly the lender is simply asking the valuer to confirm that the property is suitable security for lending, rather than providing an accurate open-market valuation. Valuers may be instructed to ‘value up’ to help the lender hit a lending quota. Sometimes a financial advisor may put a lower figure on the form than has been agreed in the hope the valuer will value it at that, lower figure and thus enable the buyer to use it to negotiate an even lower price.Book your Property ValuationWe adhere to the UK Government Property Valuation Guidelines
