Before discussing what an RICS Help To Buy Valuation is and why they are critical when purchasing a property, let’s quickly look at what a Help to Buy Scheme actually is.
They are government-backed loans, to help first-time buyers in England, purchase a new build home. The property has to be your principal residence, not a buy to let and you'll require a minimum 5% deposit of the purchase price. Loans are price capped regionally.
The Help to Buy scheme assists buyers secure a position on the property ladder who otherwise may have difficulty affording the purchase.
Unlike a mortgage, the lender doesn’t provide a set amount as the level of funding depends on the property’s value. So if the property increases in value, you pay back more and if the value decreases you pay back less when the loan is redeemed.
The following breakdown relates to England where Wales, Scotland and Northern Island have their own criteria.
The builder you are buying from must be registered with the Help to Buy scheme.
Who Is Eligible For Help To Buy?
If you’re looking to sell, re-pay or re-mortgage a Help To Buy loan, you need an independent valuation conducted by a registered RICS surveyor complying with RICS guidelines.
The repayment cost is determined by the current property valuation and not the purchase price.
An RICS surveyor guarantees you’ll get a true market valuation.
Target, a private company has been engaged to administer Help To Buy Loans, we’ll look at them in more detail later on.
They have a requirement that if you are looking to sell, re-pay, part pay (also known as staircasing) or re-mortgage your property, you need an independent RICS certified surveyor to carry out the valuation.
The main reason for this is because, as registered members of the Royal Institute of Chartered Surveyors (RICS), their market valuations are more accurate as they follow RICS guidelines and codes of practice.
In addition, they are covered by professional indemnity insurance in the rare event that mistakes or negligence occur.
The HCA was the original public body that was set up to administer the Help To Buy Scheme before 2017.
They have now been replaced by Homes England.
In relation to the loan, they handle the actual payments and a buyer will deal with them at the purchasing stage.
If you secured a Help To Buy loan before 2017, you will have had dealings with the HCA, mainly at the pre-purchase and the actual buying stage.
Currently, if you acquire property and secure a Help to Buy loan, you will have dealings with Target who are engaged by Homes England to administer the loan, arrange the re-payments, assist with the future sale and provide interest calculations, etc.
If a valuation is required for the loan application both of these bodies will require an RICS certified surveyor to complete the valuation. This provides the assurances they need and potentially saves a significant sum for the client.
Unlike other valuations, an RICS Help to Buy Valuation is more involved than a standard RICS Valuation Report. The valuation Is supplied to both the client and Target and the requirements of the valuation is completed by:
Primarily, it is very similar to The RICS Red Book Valuation and covers:
Not all properties or Help to Buy Loans are the same. Overall, the cost depends on the approximate value of the property and this is reflected within the fee scales.
If you would like more information or just need some advice, contact Camsure Home Surveys for a chat.
Once the survey is completed, you’ll receive a copy of the report, a copy of which Target will also require.
Depending on the report's contents, you will then need to engage professionals to progress matters to the next stage and this may include the appointment of solicitors, financial advisors, estate agents, or lenders.
The property market can be volatile and therefore the valuation is only valid for 3 months to ensure its reliability.
As most projects take less than this to complete, this is usually plenty of time.
Some criteria to look for when choosing the surveyor include:
At Camsure Home Surveys, we guarantee our RICS surveyors have this experience.
All of Camsure’s regulated surveyors are RICS qualified and skilled in Help To Buy Valuation Surveys.
You can find a surveyor near you easily by visiting Areas We Cover
In looking at what is an RICS Help To Buy Valuation, we’ve covered what it is, what you get and why it’s needed. Ultimately, whether you’re looking to pay off the loan, re-mortgage, sell or staircase, you can’t do it without an RICS Help To Buy Valuation.
We hope we’ve covered everything you need to know. If not, you can secure more information by chatting with one of our professionals here at Camsure Home Surveys.
RICS - www.rics.org
Really Moving- https://www.reallymoving.com/surveyors/guides/what-type-of-survey-do-i-need