sarahcount
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Post by sarahcount on Feb 5, 2018 20:43:11 GMT
SECURITY VALUE
£240,000
LOAN VALUE
£168,000
LOAN TO VALUE
70%
REMAINING TIME
180 days
ANNUAL RATE
12%
(Lendy pipeline is working overtime tonight with 3 new PBL loans. Not sure if I'm the only person who looks here nowadays)
"The security property is a first floor two-bedroom flat in a semi-detached three storey Victorian building. The property is held on a long leasehold with approximately 72 years remaining"
My first thought is that 72 years is not a long leasehold and gets caught up in the Marriage Value regulations where capital gains have to be shared with the freeholder.
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invester
P2P Blogger
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Post by invester on Feb 5, 2018 21:20:00 GMT
This must be one of the smallest loans SS have done. In fact 3 diddly ones recently.
Somehow these seem a little lower risk than the multi-million monsters as there is less room for the valuation to be inaccurate.
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zlb
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Post by zlb on Feb 5, 2018 21:47:52 GMT
SECURITY VALUE £240,000 LOAN VALUE £168,000 LOAN TO VALUE 70% REMAINING TIME 180 days ANNUAL RATE 12% (Lendy pipeline is working overtime tonight with 3 new PBL loans. Not sure if I'm the only person who looks here nowadays) "The security property is a first floor two-bedroom flat in a semi-detached three storey Victorian building. The property is held on a long leasehold with approximately 72 years remaining" My first thought is that 72 years is not a long leasehold and gets caught up in the Marriage Value regulations where capital gains have to be shared with the freeholder. thanks. having read about it, marriage value seems a consideration. I'd expect L to mention this as it's part of the financial matrix?
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keith
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Post by keith on Feb 6, 2018 13:25:25 GMT
I looked at this and something hit me. Initially this looked good and, then, the issue of marriage value came up. It seems, somehow, that almost every loan with LY has something “wrong” with it and maybe that’s fine and that’s where the 12% returns (ex ante) come from. Maybe the MV is not that material in the scene of things but I probably have too much here already so I think I’ll pass.
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gwenynwyr
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Post by gwenynwyr on Feb 6, 2018 14:45:04 GMT
My first thought is that 72 years is not a long leasehold and gets caught up in the Marriage Value regulations where capital gains have to be shared with the freeholder. Marriage Value regulations? Can anyone clarify for a tax ignoramus please?
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keith
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Post by keith on Feb 6, 2018 15:02:45 GMT
Shared benefit between leaseholder and freeholder of an increase in the lease length (AIUI)
I cant seem to paste the link here on my iPad but a google search gives a useful Wikipedia link
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warn
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Curmudgeon
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Post by warn on Feb 6, 2018 15:04:08 GMT
My first thought is that 72 years is not a long leasehold and gets caught up in the Marriage Value regulations where capital gains have to be shared with the freeholder. Marriage Value regulations? Can anyone clarify for a tax ignoramus please? Google can. See, e.g., leaseextension-uk.info/marriage-value.html
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gwenynwyr
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Post by gwenynwyr on Feb 6, 2018 17:26:31 GMT
Why didn't I think of that? Thanks
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Post by df on Feb 6, 2018 17:51:37 GMT
This must be one of the smallest loans SS have done. In fact 3 diddly ones recently. Somehow these seem a little lower risk than the multi-million monsters as there is less room for the valuation to be inaccurate. I also consider smaller loans as generally less risky. In case of default the loss is smaller, there are more potential buyers for such properties than for multi-million monsters and much smaller queues on SM if you want to exit.
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Post by dan1 on Feb 6, 2018 17:54:23 GMT
This must be one of the smallest loans SS have done. In fact 3 diddly ones recently. Somehow these seem a little lower risk than the multi-million monsters as there is less room for the valuation to be inaccurate. I also consider smaller loans as generally less risky. In case of default the loss is smaller, there are more potential buyers for such properties than for multi-million monsters and much smaller queues on SM if you want to exit. One thing to watch out for with smaller loans are the recovery costs should it default. They can quickly eat into any outstanding headroom on a loan that on the face of it has a reasonable LTV. I've no idea whether this applies to this particular loan, just a general comment.
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copacetic
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Post by copacetic on Feb 6, 2018 18:02:31 GMT
Page 21 the valuer says price per sq foot of comparables is £350-£450 then proceeds to value the flat at £517 per sq ft. He justifies because of quantum. Uncertainty principal at work here.
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ozboy
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Mine's a Large One! (Snigger, snigger .......)
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Post by ozboy on Feb 6, 2018 18:05:37 GMT
Page 21 the valuer says price per sq foot of comparables is £350-£450 then proceeds to value the flat at £517 per sq ft. He justifies because of quantum. Uncertainty principal at work here. If this is true then it's an absolute joke. We're being taken for complete mugs. As usual.
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Post by mrclondon on Feb 6, 2018 19:18:37 GMT
Page 21 the valuer says price per sq foot of comparables is £350-£450 then proceeds to value the flat at £517 per sq ft. He justifies because of quantum. Uncertainty principal at work here. Its actually worse than that, as for comparison purposes the per sqft value needs to be based on the full valuation of £255k (para 17.3) assuming a 99 year lease. VR page 4 states GIA 464.17 sq ft => £255k is c. £550 per sqft VR para 6.1 states GIA 476.88 sq ft => £255k is c. £535 per sq ft By way of compaison, the loan is £168k, add on £15k to adjust for 99 year lease gives £183k or c. £384 to £394 per sq ft depending on which is the correct figure for GIA. Which IMO suggests a firesale valuation of around 100% LTV.
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keith
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Post by keith on Feb 6, 2018 20:25:58 GMT
This must be one of the smallest loans SS have done. In fact 3 diddly ones recently. Somehow these seem a little lower risk than the multi-million monsters as there is less room for the valuation to be inaccurate. I also consider smaller loans as generally less risky. In case of default the loss is smaller, there are more potential buyers for such properties than for multi-million monsters and much smaller queues on SM if you want to exit. There’s a trade off at work here. Yes, the more standard or heterogenous the property then the easier it is to offload (also the valuation might be better given that there are more comparable). However, as per Dan1’s post immediately following yours, the recovery costs could be of a fixed nature and thus eat heavily into a small loan.
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hector
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Post by hector on Feb 6, 2018 20:52:20 GMT
Is it just me, but the more I look at the pictures used to support the 'Valuation' the more depressed about the "opportunity to invest" I become. The valuer even had to park his/her Volvo in front in order to add value......
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