View more on these topics

Time to get back to basics on buy-to-let


At the peak of the 2007 boom, the buy-to-let market was considered as a cash cow by many.

There was limited risk to investors with as little as only 10% of the value of the property needed as a deposit. Many properties were bought off-plan as supply tightened and prices rocketed. High capital values kept the rental market buoyant as tenants were priced out of purchasing property.

Fast forward three years and the story is different. Perceived risks on values are far higher, especially as prices have fallen. Lenders are insisting on a minimum 20% deposit and are far more focussed on accurate valuations.

There are many factors that valuers must consider when valuing buy-to-let property. These include mortgage fraud, the percentage of investor properties and the effect on value, changing lender criteria, repossession levels and rental demand.

To protect their mortgage book lenders are taking a more thorough approach to the value of the underlying security. Valuers should be considering the property from an investor perspective and looking at issues such as voids, service charges, letting agent costs, repairing covenants and yields.

This will increase the cost to lenders and may slow down the lending process, but it should give best advice to lenders and applicants, and protect the valuer.

It’s time for buy-to-let properties to be valued for what they are – an investment. A back to basics approach is required with lenders and valuers working hand in hand with an informed view of risk.


Stricter regulation is the way to avoid problems in future

If the FSA expected an easy ride following the publication of its MMR proposals it must have been sorely disappointed. While it might have anticipated some strong words on extending its approved persons regime – which might explain its underestimation of 20,000 affected individuals – I wonder whether in today’s environment it expected such a […]


Valuations up 61% in February

The number of valuations on residential housing grew 61% in February, compared to the previous month, according to the latest research by Connells Survey and Valuation.

Hot water: soccer scandal brings back memories for Kent Reliance boss Lazenby

Terry, Hoddle and the Nationwide line

Just weeks ago John Terry’s future as England soccer captain was in the balance as his affair with Vanessa Perroncel (pictured) dominated the tabloids. But in contrast to February 1999 when Glen Hoddle’s position as England manager was in question, this time sponsor Nationwide dismissed the scandal as a private matter, adding that the society […]

Sally Laker

Landlords set to take leading role

The downturn may result in a market shift away from home ownership and towards renting which would be a big opportunity for lenders, says Sally Laker, managing director of Mortgage Intelligence Holdings

Why your clients need some tough love

In any relationship that matters, professional or personal, you should be upfront with someone if you think they’re making a decision or doing something they might later regret. Being honest with someone and having their best interests at heart, however hard the message, is key to building trust in any relationship. So how does this […]


News and expert analysis straight to your inbox

Sign up