“I want to staircase to 100%. My housing association told me – in writing – that I could choose an independent RICS surveyor for a valuation report, so long as it was a full report with three comparable properties in the local area. But now they are disputing the valuation and want to appoint their own valuer to carry out an assessment. I am worried that they are seeking a higher valuation. However, my current valuation is at the margins of affordability, and I won’t be able to staircase to 100% if their valuer values the property more than £5,000 higher. Also my mortgage offer expires in two months, so I don’t have much time to resolve this. Where do I stand in this situation, and where can I get support?”
Thanks for your query. I can understand your frustration at the barriers placed in your way to staircasing to 100%.
In some cases a housing association might challenge a ‘desktop’ valuation (where the valuer hasn’t visited the property). However, you have confirmed that your valuer made a site visit in order to provide a full report. Also that there are no specific factors which might complicate a valuation. For example, a short lease or building safety issues. You also explained that your home is a flat.
This feature outlines available guidance, and explains your options when it comes to a staircasing valuation dispute. However, it does not constitute legal advice. It is simply to help you have informed conversations with your housing association, your RICS valuer and anyone else you contact to help tackle the challenges you face.
Summary: your options
- You could ask your own RICS valuer if they would want to review their valuation based on any new evidence.
- Your housing association wants to appoint their own RICS valuer to determine the value of your home. You could ask if their valuer and your own valuer could reach a compromise which would allow you to staircase to 100%.
- You could ask your housing association to obtain a valuation from the District Valuer Service.
- You could contact Homes England for advice on whether or not your housing association’s process is compliant with their guidance (enquiries@homesengland.gov.uk, 0300 1234 500).
- The Leasehold Advisory Service might be able to provide some support. The service provides “free, summary legal advice to help you decide what to do next”.
- You could make a formal complaint to your housing association. If you are not happy with the final response, you could make a complaint to the Housing Ombudsman Service. Though please be aware that the Housing Ombudsman Service can only consider complaints about the process, not the valuation itself.
- UPDATE 21/2/2025 – A recent court case (Mr David Doran v Estuary Housing) indicates that legal action can be an option, where a housing association is challenging a RICS valuation as being too low. The case may also have implications for shared owners where they have concerns that the housing association’s valuer has valued the property too high, as the ruling stated that a valuer’s valuation is binding on both the shared owner and the housing association. Please seek expert legal advice as applicable.
The remainder of this feature explores staircasing valuation disputes, and your options, in more detail.
Homes England: the Capital Funding Guide and the model lease
The government delivers a number of shared ownership homes via the Affordable Homes Programme. In this case, Homes England provides guidance for housing providers. Model leases are set up for the landlord to appoint a RICS valuer to determine the market value for staircasing.
Homes England’s Capital Funding Guide, Section 2.3.3: ‘For subsequent staircasing transactions, the provider shall follow the valuation requirements in Schedule 6 (Staircasing Provisions) of the model form of flat lease or Schedule 5 (Staircasing Provisions) of the model form of house lease’.
Homes England’s model lease (Affordable Homes Programme 2021-26), Schedule 6, 1.3: The Landlord shall apply to the Valuer to determine the Market Value as at the date of service of the Leaseholder’s notice served pursuant to paragraph 1.1 (upon which the price of acquisition will be based) within 14 days of receipt of the Leaseholder’s notice (or, if later, within 14 days of the Valuer’s appointment) and shall notify the Leaseholder of the amount of the Valuer’s determination in writing within seven days of receipt of the said determination.
However, many landlords allow shared owners to appoint their own RICS valuer. Homes England are broadly supportive of this approach as, in theory, it allows the owner more choice and control over the process. Although clearly this is not your experience…. It seems outside the spirit of the agreement to allow you to appoint a valuer and then backtrack.
RICS
As discussed above, shared ownership landlords (and shared owners) have to use a RICS valuer. So what do RICS say about valuation disputes? First off, they explain that: ‘RICS regularly receives concerns about valuations completed by its Regulated Members‘. However, this does not necessarily mean that valuations are wrong. They go on to explain:
I’m unhappy with the valuation figure
This is a common concern raised by a seller or buyer of a property. Usually, the person raising the concern considers the valuation figure is too high or low. Sometimes this is because the complainant has received a different value from an estate agent or another valuer.
Valuation involves professional judgement and there can be a number of reasons why two valuations are different. A difference does not necessarily indicate any misconduct by either valuer….
RICS is unlikely to investigate a complaint that a valuation is lower or higher than expected. If there is a variation between two or more written valuations undertaken within a similar timeframe, RICS may consider this further, but is unlikely to do so unless the difference is outside the courts’ accepted tolerance in valuations, which takes into account the professional judgement of a valuer. For most residential valuations this tolerance is usually up to 15%. (RICS, Appendix A, Concerns about valuations)
How are staircasing valuation disputes resolved?
Lease terms
Homes England’s Capital Funding Guide refers to: ‘the lease making provision for the resolution of disagreement or dispute that may arise, between the landlord and the leaseholder, in respect of choosing a valuer’ (Section 7.2.8).
So, assuming your lease includes a term relating to choosing a valuer, this should determine the process to be followed. However, not all shared ownership leases do make provision for resolution of such disagreements or disputes. (For example, per a Housing Ombudsman report on a complaint about a staircasing valuation – Torus 62 Limited).
Good practice: negotiation between RICS valuers to reconcile the best interests of the shared owner and HA
One housing association told us that they would be happy with a staircasing valuation within a 10% tolerance of their own estimate of the value of the property. If they had concerns they would instruct their own valuer and ask the two valuers to discuss and resolve the issue between them. Ideally a compromise could be reached which would enable staircasing to proceed.
In some cases, the housing association might need to make a recommendation to Homes England, and obtain consent to proceed with a ‘low’ valuation. They would explain the position and their findings and provide sufficient evidence to support the lower valuation.
The District Valuer Service
Your housing association could ask the District Valuer Service (DVS) to determine the value of your home. (The request has to come from the housing association – you can’t make the request as a private individual). This is an option where a shared owner’s valuer and the housing association’s valuer can’t reach a compromise. Or if you aren’t happy for the housing association to instruct their own valuer. (The DVS is part of the Valuation Office Agency (VOA). It provides ‘independent, impartial, valuation and professional property advice across the entire public sector, and where public money or public functions are involved’).
If the DVS makes a valuation it is binding on both the landlord and the shared owner. This is regardless of whether it is higher, lower, or the same as any previous valuation(s).
There are no statutory time limits for DVS valuations. Consequently it is hard to say exactly how long this process will take. However, it’s worth letting your housing association and the DVS know if you need a valuation urgently; in this case, because your mortgage offer will expire in two months.
‘Not all complaints relating to charges can be considered by the Ombudsman. Where the complaint is solely concerned with the level of the charge, we will rule the case outside jurisdiction and signpost the resident to the First Tier Tribunal (Property Chamber) and/or Lease. We may, however, look at complaints that relate to the collection of rents or service charges (including failure to consult or inadequate consultation), their calculation or how this information was communicated‘. (Housing Ombudsman, Spotlight on leasehold, shared ownership and new builds: complexity and complaint handling)
Legal action
Legal action can be costly and risky. Nonetheless, in a recent case (Mr David Doran v Estuary Housing) Deputy District Judge Boon found that a RICS valuation obtained by a shared owner – which the housing association considered to be too low – was binding on the shared owner and the housing association, given the terms in that shared owner’s lease.
Do high valuations undermine the staircasing promise?
Your RICS valuation is affordable, and would allow you to staircase to 100%. However, it is possible that a higher valuation – whether by your housing association’s RICS valuer or the DVS – would push staircasing out of reach. Particularly if it was above the amount your mortgage provider is willing to offer.
This raises an interesting question… If two valuations are within RICS 15% margin of tolerance, should shared ownership providers be obliged to favour a valuation which enables the shared owner to staircase (whether to increase their share or to staircase to 100%). Homes England’s guidance is silent on this issue. Consequently, Shared Ownership Resources has written an Open Letter to the agency to flag up the issues outlined in this feature.
UPDATED 19 February 2025 to take account of the ruling in a recent legal case – Mr David Doran v Estuary Housing.
Additional resources
Stairpay: RICS valuations for staircasing: top things you should know
Shared Ownership Resources: Open Letter to Homes England: Staircasing valuation disputes
Shared Ownership Resources: My SO Home: No. 29
Shared Ownership Resources: Shared ownership valuation: buying and selling
Featured image: Freepik
Very useful article. Shared owners face exactly the same problem in selling – HA’s give high valuations, and make the property hard to sell. Shared owners can discount selling price but it all comes out of their share – the HA will insist on getting full valuation price for their share – regardless of selling price. This is yet another minefield for shared owners.
Thanks for your comments, Michael. You might be interested to know that Homes England have updated their guidance on selling shared ownership homes. As below.
‘5.3.38.3 Where a home is sold on the same back-to-back staircasing basis but below the RICS valuation then the provider may receive its share for the staircasing transaction based on the RICS valuation in the same way. It is expected, however, that providers will avoid this scenario wherever possible especially where it would result in significant financial detriment to the shared owner. Providers should, for example, consider the reason(s) the shared owner has been unable to achieve the sale price at the market value established by the RICS valuation. If the shared owner has been attempting to sell at the RICS valuation for a long period and has not been able to secure a buyer, this may indicate that the valuation is not reflective of current market conditions.
‘5.3.38.4 In this scenario, providers may wish to accept the incoming buyer’s mortgage valuation if a copy is able to be obtained and has been undertaken by a RICS registered valuer. If another valuation is required, a desktop re-valuation will likely prove more cost effective than another in-person valuation. When requesting a desktop re-valuation, the provider should look to offer further information on other similar recent sales in the shared owner’s building, other developments where they have similar shared ownership homes, or the wider local area (via information from commercial sales portals and similar).’
https://www.gov.uk/guidance/capital-funding-guide/1-shared-ownership
Very interesting article. I wish housing associations would provide the same level of information.
One thing to note though: Homes England guidance is only… guidance. Unfortunately, many housing associations do not follow this guidance.
Thanks for your comment, Steph. The guidelines in the Capital Funding Guide should be adhered to by providers receiving grant funding via the Affordable Homes Programme (AHP). So it’s worth shared owners contacting Homes England (or the GLA in London) if they consider that their own housing association landlord isn’t following applicable guidance.
Of course, not all shared ownership homes are funded via the AHP raising important questions about standardisation of approach on matters such as valuations.
I moved into my shared ownership house five years ago, I made so many improvements including six new windows, patio doors and new front door. I have replaced the bathroom in the kitchen, and installed carpet. In short, I had to change everything. I didn’t get written permission before doing any of these things and now I’m almost ready to staircase to 100% but I have undoubtedly made the property much more expensive for me to buy the remaining share. Do you have any advice on this? I’m looking for the HA to approve my changes, I’d estimate the value of my property has gone up by around 80 K in five years.
Thanks for your query, Kelly. The key things to look at here are: official guidance, your lease, and your housing association’s policy on improvements.
The detailed information below doesn’t necessarily answer your question, and I would suggest you contact the Lease Advisory Service who offer: ‘free summary legal advice to help you decide what to do next” (https://clients.lease-advice.org/#/). But I hope the information which follows will help you frame any request for advice from the Leasehold Advisory Service, and in communicating with your HA.
First off, official guidance. The gov.uk site (https://www.gov.uk/shared-ownership-scheme/buying-more-shares-staircasing) says:
‘Valuations and home improvements
If you have made home improvements which affect the value of your home, the valuation must show 2 amounts:
* the current market value – this is the home’s value including any increase because of home improvements
* the unimproved value – this is the home’s value ignoring any home improvements carried out
If you have your landlord’s written permission to carry out the home improvements, the price of additional shares is based on the unimproved value.
If you did not get your landlord’s written permission, the price of the additional shares is based on the current market value. This price is likely to be higher.’
However, Homes England’s Capital Funding Guide for shared ownership doesn’t seem to mention written permission from the landlord (https://www.gov.uk/shared-ownership-scheme/buying-more-shares-staircasing). It simply says:
‘Classification of improvements and repairs
Homes England anticipates an improvement being something that might add to a property’s value rather than something that is being replaced or repaired. The staircasing valuation should therefore be based on the market value had the improvement not been undertaken.
If the shared owner has not kept the property in good order, as is required by the Shared Ownership lease, the staircasing valuation should be based on the market value as if it had been.
Therefore a current market valuation may need to be adjusted upwards or downwards depending on any act or omission committed by the shared owner.’
NB. SO homes in London are usually regulated by the GLA rather than Homes England. However, their guidance is similar in respect of improvements.
Your lease is a legally binding contract, so you will need to check what it says about any need to obtain permission from the landlord for improvements. You should also check your landlord’s policy on improvements (though I don’t know if this would be legally binding, if there is no mention in your lease agreement).
Hope this is useful. Please do let me know how you get on.
Hi, not sure if I’m in the right section but I have just had my valuation for the h/a, I’m staircasing and simultaneous selling. The valuation has come in fifty thousand pounds less than the estate agent valuation. As I have a 50% share is the fifty thousand split or is anything over the h/a valuation mine. Seems to be different opinions online.
Your previous help has been invaluable in dealing with the housing association.
Thanks.
Steve
Hi Steve, Thanks for your comment. It’s good to hear that Shared Ownership Resources has been helpful in dealing with your housing association.
First off, it’s not unusual for an estate agent to value relatively high. As the Unbiased feature below points out: “Bear in mind that estate agents will be looking to enlist you as a client, meaning they’ll want you to sell your house through them. For this reason, the valuation could be higher than is realistic – overvaluing can be an to get you on board, but good estate agents will avoid this practice as it is ultimately counterproductive.”
https://www.unbiased.co.uk/discover/mortgages-property/ownership-improvements/how-much-is-my-house-worth
On your second point, this is slightly complicated by the fact that different guidance applies to different SO homes. For example, the GLA provides guidance for SO homes delivered under the Affordable Home Programme (AHP) in London, and Homes England provides guidance for AHP SO homes outside London. But a lot of SO homes aren’t delivered via the AHP, but via Section 106 planning agreements., or by for-profit providers. In short, check your lease and your own housing association’s policies.
With that proviso in mind, Homes England’s Capital Funding Guidance says what should happen both where a sales price for simultaneous sale and staircasing is above the RICS valuation, and where it is below the valuation.
‘5.3.38.2 Where a home is sold above its RICS valuation outright outside of the nomination period through a back-to-back staircasing transaction then the value that the provider receives for the staircasing element should be based on the RICS valuation of the home as per the staircasing schedule in the lease.
5.3.38.3 Where a home is sold on the same back-to-back staircasing basis but below the RICS valuation then the provider may receive its share for the staircasing transaction based on the RICS valuation in the same way. It is expected, however, that providers will avoid this scenario wherever possible especially where it would result in significant financial detriment to the shared owner. Providers should, for example, consider the reason(s) the shared owner has been unable to achieve the sale price at the market value established by the RICS valuation. If the shared owner has been attempting to sell at the RICS valuation for a long period and has not been able to secure a buyer, this may indicate that the valuation is not reflective of current market conditions.’
https://www.gov.uk/guidance/capital-funding-guide/1-shared-ownership
Hope this is helpful. Good luck with your sale. Please let me know how you get on.
I’m a shared owner who was prevented from staircasing to 100% three years ago due to a lack of EWS1. Because I’m self employed and was a new parent at the time, it has taken me three years to get my earnings back to the place where I can afford to staircase to 100%. Now I have had a RICS valuation that is higher than the valuation I had done then, to the point where my flat is now unaffordable. Do I have any basis to ask the HA to honour the earlier valuation? They have made around £30k in rent from me due to the delay. They do receive funding from Homes England for Affordable Homes.
Thanks for your comment. Though I’m sorry to hear you’ve been priced out of staircasing due to a lack of EWS1 three years ago. Staircasing is priced at ‘current market value’ – an approach which would fail to take into account the building safety issues you’ve encountered.
As your home was funded under Homes England’s Affordable Homes Programme, you may want to contact them to ask if there is any discretion given the specifics of your situation (sharedownership@homesengland.gov.uk). It’s also worth contacting End Our Cladding Scandal, as they have expertise on shared ownership and building safety.
Good luck! Please do let me know how you get on.