AC sensitive to Q & A, deleting even relatively innocuous Qs

Im assuming that those werent the words you used as they seem a trifle inflamatory and not really innocuous.

The question is was it hugely overvalued.

Couple of points, valuation was 2 years ago, and the actual inspection was in Nov 2012 as the valuer wasnt asked to check the condition of the property, its a desktop valuation. However, he quite clearly states that it was in good repair, bar some wear & tear. As we know buidling deteriorated considerably and there is also info on previous defaults which would be outside valuers purview and clearly impacts the valuation on a local level

Like you I am disappointed in the amount that the value has dropped particularly in what appears to a strong student rental market. However if you compare the valaution now to what it was when the LPA first took possession, it has almost doubled. I also wonder whether the student market hasnt changed over the past couple of years with demand being for high end, high spec accomodation as offered by the various REITs in this sector, the projects that I seem to be financing through P2P and the offers to invest in student property I get by email.

Personally I would be happy to hang on to the block in the hope of getting a higher price until I look at the interest accruing which makes that totally unrealistic as it can never be serviced IMHO. Better to cut our losses now, get back some capital which can earn actual rather than phantom returns and see what happens when AC pursue the other avenues open to them for recovery. Otherwise, while I might get more capital back I forego all the interest it might earn over the next 6 months while I wait for something that might not happen. Once everything has been done, then it may well be relevant to investigate the valuation.

ozboy - I've checked in on this and your question was deleted, as per the email to you giving the reasons, as you surrounded your question with your opinions on the matter.  The question itself is pertinent and I believe Andy has already covered it on the forum.

To answer the question itself we sent you this response:  "In response to your question, we will not be able to pursue anyone for professional negligence unless a loss has been crystallised. We currently still have further security to realise. Once we have done this, we will consider our options in respect of any loss suffered, if it transpires a loss is actually suffered. This is standard procedure."

Edit:  If memory serves Andy's previous response also covered the point about the defaults where he said we were not aware and nor could we be aware as there isn't a central database we could have checked.

If you framed your question as an actual neutrally phrased question without highlighting certain words in all capital letters and surrounding it with statements of your own opinion then it would have been answered.  You still have that opportunity should you not be satisfied with my response above.

Thank you both.

I understand and appreciate why you have posting rules and will make no further comment other than if AC were unaware of two previous bankruptcies when offering the Loan, and taking into account your reason, then readers can draw their own conclusions.

I have asked two questions on the Q&A recently: the first time I was given the brush-off with an answer that referred to another source that allegedly contained the answer to my question when it clearly doesn't; the second question was deleted because it apparently contained information that was so secret that the borrower and his lawyers would have been unable to work it out for themselves, the email explaining why did not address the legitimate questions that I had also asked.

What has annoyed me most about the email sent out on 20/1 was that, up until that point, Lenders were being told the property was valued at £X and suddenly it was worth £X-33%. I don't know how others feel about this issue but to my mind if you are going to place a charge over property as security then you should ensure that it is valued correctly. In addition it would also seem common-sense for P2P lenders like AC to continue to periodically check the condition and value of the security for the duration of the loan. AC cannot afford to play a percentage game, as is the case with big retail lenders, whose business model allows for a percentage of failures. Too many AC loans are failing for want of proper diligence in my view. If you do not listen to your Lenders then like me they will vote with their feet. The thing is it looks like you don't really care as long as you are making money, both from lenders and borrowers. 

Out of curiosity, and a wish to learn from the experience, I'd like to better understand how a property which one might naively expect to be worth over £3M, is only worth £1.8M.

We've been told that the borrower neglected maintenance, some of which has since been remedied, and that it now transpires the building has a history of receivers being brought in. These don't explain a 40% drop in value.

Gross annual rent for the fully-occupied building is now £122K. This compares with £248k which was used for the valuation. The valuation states that it was for AC to confirm the £248k was genuine. A halving of rental yield would easily explain the drop in value with no blame at all to be attached to the valuer.

What has not been explained is how the borrower extracted twice as much rent from property as the receivers have been able to. Nor why only one third of this much reduced gross rent would be passed to lenders, should we decide to hold the property for another year. As ilmoro says, given a rental yield of £40k, and a interest bill of many times this, you have to cut your losses. But why would we only get £40k per annum of rent from a property that 2 years ago yielded 6 times this amount?

If I were to point fingers, given the numbers we have, it wouldn't be at the valuer, it would be at whoever is currently in charge of letting.

I think that the discussion as stands above does not need to go in the pink section. It is not identifying the borrower nor even the loan, and it has not named parties that could take exception to some of the comments e.g. it has not identified the party carrying out the valuation.

But I would ask for anyone participating on this thread to post cautiously and to think carefully about the content of their post. As there are some emotions flowing, that could lead to inappropriate posts.

The valuation document.

It seems to me that if a view on a loan can only be expressed in such a way as to risk libel, then that view is idle speculation, and isn't of much general interest.