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Post by mrclondon on Dec 4, 2017 22:52:22 GMT
Not sure whether I'm doing something silly, but here are my observations on the valuation.
- Last sold July 2014 @ £460k (which feels below OMV at the time, maybe ?? )
- August 2017 VR £900k , Loan is £620k
- VR page 6 gives internal area as 102 sqm / 1100 sq ft.
VR page 9 gives 4 comparables, which work out on a per sqft basis as £585, £580, £592 & £598 respectively. (VR typo as last 2 comparables have same address)
As a sense check, 1100 sqft x £580/sqft would be just £638,000 or expressed the other way the valuation of £900k would be £818 / sqft
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michaelc
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Post by michaelc on Dec 4, 2017 22:55:16 GMT
The VR has this as a detached house. Zoopla says it is a semi. I'm confused.
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Post by mrclondon on Dec 4, 2017 23:07:30 GMT
Streetview confirms detached BUT it is next door to a primary school, and there is a very odd looking building (part of the school) quite close to this house. There also appears to be no land between the wall of the house, and the start of the school grounds. Most of the properties on the road are semis.
The valuation of £900k looks hugely top heavy IMO.
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locutus
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Post by locutus on Dec 4, 2017 23:14:51 GMT
The valuation of £900k looks hugely top heavy IMO. Why do you say that? The last 3 sale prices on that street are below. In addition, the security is a detached (the 3 below are all semis) and the security also has the largest garden on the street by quite some way. 47, S***** G**** Road £1,125,360 Semi-Detached, Freehold, Residential 01 Mar 2017 4 bedrooms 35, S***** G**** Road £870,000 Terraced, Freehold, Residential 24 Feb 2017 3 bedrooms 45, SS***** G**** Road £1,025,000 Semi-Detached, Freehold, Residential 02 Dec 2015 4 bedrooms
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michaelc
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Post by michaelc on Dec 4, 2017 23:22:15 GMT
Yes just seen that and also confirmed (via OS plans) that that house is indeed no 15 and is detached - next to the school. Its overvalued like all of them are but its value is also a bit clearer than some and I actually like it. I'll be going in for a modest amount. I hope I won't live to eat my words here....  |
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Post by mrclondon on Dec 4, 2017 23:22:49 GMT
locutus, judging by the comparables in the VR ... despite being detached it is much smaller than most on the road 1100 sq ft compared to 1800 sqft for most. The 4th comparable is the closest match - a slightly bigger detached at £770,000 (Sept 16 price, £598 / sqft) I just can't see it selling for much above £600 / sqft being right next to the school.
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locutus
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Post by locutus on Dec 4, 2017 23:35:08 GMT
mrclondon good points. Even paying a small premium for detached and bumping the value to £650/sqft makes the LTV quite unattractive and that is without the bullet interest due at term.
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michaelc
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Post by michaelc on Dec 5, 2017 0:03:01 GMT
Not sure I look at the LTV in isolation. e.g. if the loan was in sterling with a crazy LTV of 99% but the security was an amount of cash held by the Bank of England I'd be happy to invest.
Obviously that's a long way from the case here, but the principle applies and in any case I'll be in for a modest four figures on this one. I'll reopen this thread in six months !
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Post by mrclondon on Dec 5, 2017 0:24:06 GMT
Not sure I look at the LTV in isolation. I try to assess the background of loans against two criteria - factors that influence the risk of default (of which borrower's background is one) - factors which influence the risk of loss on default (of which LTV is one) All we have been able to examine this evening is factors influencing the risk of loss on default. As well as LTV and location that we have discussed, there are macro economic issues such as housing market weakness in London, brexit issues etc that we have discussed from time to time. We know nothing about the borrower, his business "integrity", his net worth, his leverage, his cashflow (does he have a salary or other "guaranteed" income). The risk of default simply can't be evaluated at the present time. IMO, only if the risk of default can be considered low, can a more relaxed view be taken of the risk of loss on default.
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sirius
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Post by sirius on Dec 5, 2017 9:59:29 GMT
locutus , judging by the comparables in the VR ... despite being detached it is much smaller than most on the road 1100 sq ft compared to 1800 sqft for most. The 4th comparable is the closest match - a slightly bigger detached at £770,000 (Sept 16 price, £598 / sqft) I just can't see it selling for much above £600 / sqft being right next to the school. Think fire sale and the LTV is about 100%. Not for me.
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r00lish67
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Post by r00lish67 on Dec 5, 2017 10:27:57 GMT
locutus , judging by the comparables in the VR ... despite being detached it is much smaller than most on the road 1100 sq ft compared to 1800 sqft for most. The 4th comparable is the closest match - a slightly bigger detached at £770,000 (Sept 16 price, £598 / sqft) I just can't see it selling for much above £600 / sqft being right next to the school. Think fire sale and the LTV is about 100%. Not for me. Plus, as highlighted in the other thread, it sounds as if investing in this one we're effectively roped into financially supporting a DFL loan on the linked loan. If the reason for the fire sale is a default due to the DFL going badly, then it becomes worse - a 100% LTV PBL and a half finished house in Paddington, potentially.
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