Homes England issues new guidance on shared ownership valuations but campaign group warns gaps remain

But Shared Ownership Resources raised concerns last year over conflicts between valuations commissioned by housing associations and shared owners, especially in cases where the higher price would prevent the tenant from getting a mortgage.

The not-for-profit warned the government that such disputes can put shared owners a disadvantage and, in the worst cases, “undermine the promise of full homeownership”.

It claimed the Homes England guidance and model lease were “silent” on this question.

Sue Phillips, founder of Shared Ownership Resources, said its case studies reveal shared owners have “had very poor experiences” of valuations.

In one example, a resident claimed their landlord had tried to get them to use a different valuer after being unhappy with a valuation they had allowed the resident to source.

Shared Ownership Resources also pointed out that the new guidance allows landlords to be flexible when accepting mortgage offers.

This follows an “emerging issue” of properties being valued for mortgages at a lower rate than a RICS value – a situation known as a ‘down valuation’, which can lead to sales collapsing if buyers cannot pay the difference between the mortgage and RICS value.

In its update, Homes England clarifies that landlords should consider these cases individually and can accept a buyer’s offer if the mortgage valuation is not made available.

But while the group said it “welcomes the increased clarity” in the updates, it claimed there are “still gaps which will concern affected shared owners”.

Ms Phillips claimed the guidance on down valuations “does nothing” for shared owners forced into a distressed cash sale, meaning they must sell the property quickly and below market rates.

She said: “Without a lender’s down valuation providing evidence for a lower sales price, shared owners undertaking distressed sales remain liable to pay over any difference between the sales price and the RICS valuation to the housing association.”

Homes England said its updated valuations guidance aims to make it clear where flexibility will help shared ownership sales be carried out smoothly and at minimal cost to the owner, though the areas of discretion depend on all involved agreeing.