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Post by df on Feb 6, 2018 20:58:13 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. That's great, only 30% above headline LTV. Much better than PBL155 and many others. I wish one day valuations become regulated so they don't mislead lenders. I would still lend at 100% LTV, but very much prefer platforms to be honest and transparent about the risk.
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Post by df on Feb 6, 2018 21:10:41 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...... I find real images more attractive than drawings or cartoons of what it might look in the future.
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mikeymike
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Post by mikeymike on Feb 7, 2018 13:36:14 GMT
Link to valuation report not working! My bad ISP dropped out and logged me out
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michaelc
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Post by michaelc on Feb 7, 2018 17:39:14 GMT
That's great, only 30% above headline LTV. Much better than PBL155 and many others. I wish one day valuations become regulated so they don't mislead lenders. I would still lend at 100% LTV, but very much prefer platforms to be honest and transparent about the risk. What I don't get is that banks use these RICS valuations as part of their decision when lending on regular prime mortgages. Maybe they already know how poor they are and so insist on very careful checking of the applicant himself? I think at the start of the "credit crunch" there were stories of folk not getting their mortgages due to the valuation coming in too low but they were not the norm.
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copacetic
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Post by copacetic on Feb 7, 2018 18:16:42 GMT
That's great, only 30% above headline LTV. Much better than PBL155 and many others. I wish one day valuations become regulated so they don't mislead lenders. I would still lend at 100% LTV, but very much prefer platforms to be honest and transparent about the risk. What I don't get is that banks use these RICS valuations as part of their decision when lending on regular prime mortgages. Maybe they already know how poor they are and so insist on very careful checking of the applicant himself? I think at the start of the "credit crunch" there were stories of folk not getting their mortgages due to the valuation coming in too low but they were not the norm. Unfortunately there's a goal alignment mismatch in P2P vs banking. A bank will likely specify a conservative valuation to their valuer and have their own in house DD checks as well because any capital loss comes off their bottom line. A P2P company is lending other people's money and taking a (mostly) up front fee for themselves which increases as the amount loaned increases. This gives them an incentive to overvalue the asset to lend as much as possible without fear of capital loss. Obviously capital loss is bad in the long term business model as it makes attracting new investment hard but as we see regularly in the news short term gains are what a lot of CEOs look to achieve and are rewarded for.
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