PBL 091 - Public House Conversion to Residential, Emsworth

I'd think £200 is more likely.

Am I looking at the wrong data or have things changed in the past week or so?
On the pipiline I read:

PBL 91 - Public house conversion to residential, Emsworth


Value: 435k (was it 300k?)

Loan: 304k (was it 210k?)


It also seems the valutation document has been messed up totally.

The Valuation Date is reported as 6 March 2016 (the original one), but the report starts with "Instructions. On 4 April 2016 you requested....".

Furthermore:
a) the GDV table include finance calculated at 8% (less than half paid here). This should be revised.

b) We are lending this guy more than he paid for the whole place initially (he paid 290k, we lend 304k??). This looks crazy to me. The security is too weak compared to current market prices.

What SS is lending (304k) correspond to:
93,5% of the marketed-initially requested price
105% of the market price really paid few months ago.

This looks to me too far from the Prudential 70% max LTV SS has set for the network.
I have put to zero all my prefunding, at least until I understand what is going on.

I hate when things suddenly change with no reason and no explanation.
It would have been much better to have a second document explaining what new facts have been considered...

The got planning so value increased and loan increased to maintain LTV. I expect valuation is a retread amended to reflect planning. Valuation is worked back from GDV to give residual current value. No idea why finance so low. Report is dated 6/4 but inspection done 8/3 so definately an updated version

The calculation of the 'residual value' can and should only be used as a theoretical exercise when you don't have market data (and is anyway subject to so many variable that you can manipulate it in the directions you like).

The fact is that in this case we have a pretty clear market value of 290k, which is exactly the price paid few weeks ago for this same security.
There cannot be a more accurate estimate of the security value (which is all that matters to me as a lender) than this market price.

Did you not see the update added by SS 3 days ago ("New valuation in after recent grant of planning permission uplifted value to £435k") or is your argument that securing planning consent adds no value to a plot / premises?

Nearly all SS loans are valued on a residual value where there is a development project element involved but they are lending against current security value (PBL) rather than GDV (DFL) value. Dont have them to hand but prettt sure N-U-L & Liverpool pipeline loans are also on a residual basis. I assume this is the standard method to take into account the value of planning for a specific project. It is heavily caveated. Finance costs are for half build time so is that 16%?