LOAN SECURITY VALUATION Flashcards
Guidance on LSV?
RICS Valuation Global Standards 2020
Bank lending valuations and mortgage lending value guidance note 2018.
What platforms do you get your comparables from?
Rightmove Plus, Land registry, Estate Agents.
How do you adjust comparbales?
Using the comparbale matrix on the software provided by SDL - otherwise in a spreadsheet, as I would for another valuation using the comparable method.
What are some risks of properties for lending?
New builds, flood problems, development,
Garfield Road - How would you know if there is suspicious activity?
Gut instinct – client withholding information, back to back sale, lied about what happened ie conversion, cant prove the value, HMO, buy to let rather than mortgage
St Hildas Avenue - Does an AST apply?
Assured Shorthold Tenancy -
What would make you think a property is NOT suitable for secured lending?
If it did not comply with lender guidance i.e. if the PP could not be proved and was suspiciously high. If there was further reporting needed, such as cracking needing attention from a Structural Engineer, or a dampness report.
Richmond Road - Due to difficulties of Covid 19, how did you go about valuing commercial buildings?
I stated there was market uncertainty to this valuation, due to the lack of comparables. It made it difficult to value, so I communicated with various agents to get further insight of the situation of commercial buildings.
St Hildas Avenue - In relation to LSV what is a HMO & How can you tell?
Home in multiple occupation. Signs of one are accommodation which is has compartmentation, locks on doors, and most if not all bedrooms having ensuites.
St Hildas Avenue - What is the mandatory licencing details that apply to HMO?
Housing Act 2004.
St Hildas Avenue - How do the contraventions of BC and fire safety affect the valuation?
Within the valuation, I stated they were there and advised the lender should pay particular attention to these factors. Ultimately, it is the lenders decision to go ahead with lending on this property. I referred back to lender guidance said on this matter, which stated how to move forward.
St Hildas Avenue - How would a different yield affect the valuation? How did you arrive at an appropriate yield?
If there was more risk to this property, a higher yield would have been applied, which would indicate a lower capital value.