Determining the value of property fairly, is an essential step in distributing the assets in a deceased estate. A building and the land on which it stands, is likely to be the most valuable possession the deceased left behind. We share the factors determining how much a property is worth in England.
Factors Determining Property Worth
Any executor of a deceased estate needs to know how to determine the fair market value of a property. This is essential in the interests of fairness among the heirs. It is also a key input to calculating whether or not there is any inheritance tax due on the estate.
Determining the value of a property fairly is also a critical step towards selling the asset on the open market, if necessary. A potential purchaser may also know how to determine the fair market value of the property, in terms of prevailing market factors.
The first impression of any property is also very much in the eye of a beholder. An executor should also bear in mind the human factor, and be prepared to consider whether repainting the building or tidying the garden will yield a net benefit to the heirs.
Determining Fair Market Value of Property
The Law of Supply and Demand Prevails
The law of supply and demand determines that if a type of property in an area is scarce, then demand and price for it will rise. Conversely, if there is less demand than supply, then the value of that particular type of property will tend to decrease.
This economic principle affects property prices too. However, there are a number of values in play here, that influence the value of a particular property:
- Population growth and increasing urbanization can make fringe urban areas increasingly popular.
- Prevailing economic conditions can affect the price that potential purchasers can afford.
Property Location Is Equally Important
Location can be even more important, with fashionable areas commanding increasingly higher prices. Other factors that come into play include position relative to shopping centers, good schools and desirable recreations facilities. Conversely, a family home near an industrial area can have an opposite effect.
However, things are seldom that simple in the Avery Associates world of property valuation. Those very same factors can have the opposite effect, when determining the value of property fairly in a particular purchaser’s mind.
That’s because commuting costs and traveling times work in two directions. They are driving the renewal of previously unpopular London suburbs. But they are also encouraging work-from-home-living in the countryside. A property valuer can be a valuable ally, as long as property prices keep fluctuating!
Access And Property Values in England
We live in a highly mobile society, where transportation accounts for an increasing amount of our time. This is why sellers and purchasers of property in England should visit the site personally, or ask a professional, RICS qualified valuer to assist.
Access plays an increasingly important role in determining the value of property fairly, especially in Greater London with its huge commuting population. Factors like easy access to motorways and through roads, can be a significant time and money saver.
Much the same applies to properties in rural areas. Living at the end of a narrow country lane can guarantee peace and quiet when we are retired. However, busy Generation Xs and Generation Zs may see things differently, at the beginning and end of a busy working day.
Fair Price: The Determining Factor
A property for sale that advertises regularly, may attract suspicion in buyers’ minds. Correctly pricing a property is essential, in order to attract interest, and not have to negotiate later. An executor should also rememeber that the heirs will become increasingly inpatient for their share.
The average price of similar properties in the area is a tried-and-trusted industry norm. The average purchaser may not wish to pay more, for the special features we may believe justifies a higher price. We need to switch off our emotions, when determining the fair market value of a property.
Establish a Fair RICS Property Value
We lose money every day a property stands empty. We have no tenant income, are earning no interest on the capital, and we have to pay the Council too. When you run the numbers over say three months, you may find the cost of a professional valuation is a wise investment.
The Royal Institution of Chartered Surveyors, abbreviated to RICS, has an enviable reputation for property valuation in England going back over decades. RICS valuers on the Avery Associates panel, complete in-depth training with the Institution, and follow annual refresher updates.
Avery Associates has a special arrangement with top RICS valuers across England. We work with executors of deceased estates on a regular basis, and take care of all inheritance tax submissions. Why take chances with a property valuation? Rather leave it to the acknowledged experts!
More Information
Changing Property Probate Value After Tax
How to Value a House and Contents for Probate
Jeff is reliable, extremely knowledgeable and personable, as I know when instructing Jeff to assist me with probate valuations for my clients, and when I’m acting as an executor to an estate. Jeff also provides probate property valuations for the HMRC making you feel very looked after. Ella Millett
