LOAN SECURITY VALUATION Flashcards

1
Q

Guidance on LSV?

A

RICS Valuation Global Standards 2020

Bank lending valuations and mortgage lending value guidance note 2018.

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2
Q

What platforms do you get your comparables from?

A

Rightmove Plus, Land registry, Estate Agents.

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3
Q

How do you adjust comparbales?

A

Using the comparbale matrix on the software provided by SDL - otherwise in a spreadsheet, as I would for another valuation using the comparable method.

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4
Q

What are some risks of properties for lending?

A

New builds, flood problems, development,

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5
Q

Garfield Road - How would you know if there is suspicious activity?

A

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

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6
Q

St Hildas Avenue - Does an AST apply?

A

Assured Shorthold Tenancy -

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7
Q

What would make you think a property is NOT suitable for secured lending?

A

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.

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8
Q

Richmond Road - Due to difficulties of Covid 19, how did you go about valuing commercial buildings?

A

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.

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9
Q

St Hildas Avenue - In relation to LSV what is a HMO & How can you tell?

A

Home in multiple occupation. Signs of one are accommodation which is has compartmentation, locks on doors, and most if not all bedrooms having ensuites.

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10
Q

St Hildas Avenue - What is the mandatory licencing details that apply to HMO?

A

Housing Act 2004.

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11
Q

St Hildas Avenue - How do the contraventions of BC and fire safety affect the valuation?

A

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.

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12
Q

St Hildas Avenue - How would a different yield affect the valuation? How did you arrive at an appropriate yield?

A

If there was more risk to this property, a higher yield would have been applied, which would indicate a lower capital value.

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