Why There's More To A Good Valuation Than Meets The Eye

Rob Flucker, Associate at Knight Frank Newcastle, shares his expertise on valuations.

Everybody likes to know how much their property is worth and getting a good valuation can open doors, but there’s more to an accurate valuation than ten minutes research on Zoopla. And getting it wrong can prove costly.

I’ve been a residential valuer for 13 years now and provide valuations for property owners as well as lenders so I see both sides of the fence.

But whether I’m valuing a single dwelling, a portfolio of properties, student accommodation, or advising on how much a planned development will be worth – one thing always holds true – accuracy is your friend.

An inflated valuation not only puts the bank at risk, but also the borrower as they may be over-exposed if the market falters or the property needs to be sold. Alternatively, an under-valuation can reduce the loan amount available to the customer, put a stop to their plans or increase the cost of borrowing.

Here are my tips on getting an accurate valuation:

Provide as much information as you can

The level of information a valuer may ask you for can feel intrusive and unnecessary. However, providing as many facts as possible means the report will be accurate. Give all the details you can about tenure, use, alterations and occupancy to make sure you get highly relevant advice and a good strategy for moving forward.

Limiting information means that assumptions have to be made which may not reflect the true nature of the property and can lead to distorted advice.

Ensure your valuer has considered all legislation

Your property adviser should take into account all current and relevant legislation and point out any upcoming changes that may impact upon your home or investment. For example, the Government is proposing changes to residential leasehold practices which means that leaseholds on new build houses may be banned and ground rents on new build long leasehold flats may be zeroed. These proposals could be backdated to 21 December 2017, the date of the announcement.

Also, if you are buying or own a residential property portfolio, changes to Houses in Multiple Occupation (HMO) regulations come into effect on 1 October this year. The definition of the term HMO has been revised meaning that some properties which currently fall outside the requirement for an HMO licence, may need a licence from 1 October onwards.

Be mindful of location specific trends

Most residential areas will have a ‘ceiling’ price that people are not prepared to pay beyond for properties in that location. Of course, there are always exceptions to the rule. An experienced valuer can give you sound advice regarding specific property trends in that location to ensure any investments you make, are made on an informed and strategic basis.

We value a lot of investment property portfolios for lenders and private individuals. It is our job to advise the investor and/or the lender on the realistic price a portfolio may achieve if sold on the market along with the most appropriate disposal strategy for the specific location. Some portfolios will be sold as a single lot whereas it may be appropriate in another location to break up a portfolio into smaller lots. The correct advice is imperative if the best price is to be achieved.

Look around you

Be aware that infrastructure or development proposals in the vicinity of your property may affect its value. Ensure your valuer is thorough in their research of any recent works or proposed works, nearby planning approvals and potential rights of way that may affect the property. Things like wind farms and landfill sites may impact on values.

Get advice early doors

Whether you are thinking about selling your home or land, buying an investment property or portfolio, building an extension, developing a plot or having a house designed and built – getting advice from a property expert early on in the process can make or save you a lot of money.

We often advise developers on the cost implications of proposed schemes. This can include reigning in an architect’s design aspirations. Award winning design may be impressive but development costs can be high and this can ultimately lead to a scheme being undeliverable.

Professional advice regarding location, unit size, specification of the proposed properties and the potential sale prices of the complete units can make or break a developer’s aspirational scheme and is essential from the outset to ensure viability.

Rob Flucker works in the Residential Development & Investment, Valuation & Advisory team at Knight Frank in Newcastle.

Rob and his team value high-end single dwellings, residential and mixed-use property portfolios and student accommodation including HMO and purpose built stock. They also provide development and valuation advice for schemes ranging from single house plots and barn conversions to large multi unit housing estates.