Property in Skewen DEFAULT - Partial recovery only

lobster I was in the original loan, but not the renewal, because it was only a piddling loan for a 3 bed property i honestly didn't pay it much attention, the property was bought for £62k in august 16, zoopla shows a 5% drop in property prices on this street over the last 12 months, and yet FS are still pushing this for another renewal with 

 'Previously valued at £70,000, we have a realtime valuation that puts the current value between £85k-£129k, with an estimated OMV of £106,00.' my bold.

So it would appear, in complete contradiction to zoopla estimates of a 5% drop, that this bungalow has increased its value by over 65% . 

Yet another ridiculous RICS over valuation.

It's not on the market, so we can only assume the borrower, after 12 months, is still trying to get a BTL mortgage. Best hope for this is that the borrower finds the interest owed so they can re-new, then barge-pole it.

Edit. Xed with syalith.

Wow. i didn't see that, which makes the rics valuation even more ridiculous , it does mention in the particulars something about a part exchange, i wonder if that was why the previous selling price was so low?

Property prices area at best "fluid" at the moment but they are all "optimistic" in my view.

Frankly I would be cautious unless the valuation is in the order of 63.5% and even then I would be very cautious - but I would check previous sales prices as part of my DD.  I personally find most of the  valuations are, in my view, "optimistic" so I guess they are weighted towards the borrower.

The valuations FS seem to accept seem to be based on the values of what could be achieved 6 - 12 months ago and assume there is little or no risk of a change.

Property prices are falling, especially in the London area.  This is not reflected in present valuations.  The risk of interest rate increases forcast  for  November will have an effect on property prices.

It's the latter.  The Londonderry loans for example are now approaching the 500 day mark, and no recovery initiated.

To be fair, it can genuinely be the right call. Despite popular opinion, I still hope/expect those loans to (eventually) repay - i do wish they'd get a move on though.

Edit: for clarity, I meant I expect the Londonderry loans to repay, I haven't looked at Skewen.

Just had another of the dreaded  "Funds awaited"  updates.

This loan is starting to smell highly unpleasant imo -  particularly the recent update :  "Borrower is expecting to receive funds from a separate project - will renew this loan once funds received."

Errr , what  "separate project" , precisely ?


fundingsecure   -  have you considered asking the borrower when they expect to receive these funds from the "separate project"  , given that the loan is already  7 weeks overdue ?  Just a thought ......

Firstly, it is now 1.5 years since the original loan which stated "Some minor refurbishment will be required to bring it to a high standard before being resold / let." ....so that is clearly nonsense.

So it all comes down to whether you think £46k + fees can be recouped from this thing. In my view worse case you're not going to lose a fortune on this (although I come from a part of the country where 46k won't even buy you a parking space so not the type of property I know much about)