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  • Refurbish/Develop

    Best way to add value to 2 new BTL purchases?

    Conspiracy is too strong . It implies its all a bit underhand .

    Collusion I think is my preferred word

    And I`ve no problem with that collusion . I would expect it in fact

    The lender has to naturally protect their business

    How else do you explain an £86,100 offer and then a £86,100 valuation?

    But somehow you assure me there is no influence !!

    The lender knows the offer price before the valuer goes round

    Its a clear collusion and influence  in the industry

    In fact its transparent collusion . They dont even try to hide it

    If they did try to hide it they would put a figure around about the £86,100 like 85K or 87K maybe

    I think the lender gives a fig or if not they get it from the agent but the valuer would be mad to give the exact offer  figure when the figure is an obscure one as the lenders will smell a rat immediately

    Its a bit silly tbh in the face of that evidence to believe there is no collusion let alone assure me

    The surveyors themselves I agree wont have day to day contact due the volume

    That`s why i said the managers. Of course they will have meetings and contact

    But hey Essex to give those assurances you have to have evidence or knowledge

    Assurances is more than opinion . I give my opinion not assurances

    It adds a certain gravitas for you to give assurances

    If you said to me ....I assure you JC that lenders do not try to influence surveyors valuation because i myself work as  a senior manager for a lender I would take that on board

    But giving assurances you have to back that up with more than what you are

    You haven`t done I`m afraid where as I have given strong evidence of collusion

    Which is probably why you want to leave it there I guess - as you are on a losing wicket


    Jonathan Clarke. http://www.buytoletmk.com

    I have worked for mortgage lenders - many years ago.  Then, as now, if a surveyor downvalued a property there would be suggestions that the surveyor was acting on the instructions of the lender to be cautious.  It wasn’t true then and I don’t believe it to be true now.

    When surveyors are instructed they are given the purchase price or estimated value included on the mortgage application form but it is for them to make a judgement on what they think the property is worth.  In an active market there may be a number of people who would compete for the same property and therefore easier to judge if the price being paid is reasonable and if there were other potential purchasers ready to step in at that price if that purchase didn’t go ahead - they won’t speculate if somebody else would be prepared to pay more which is why valuations are a maximum of the purchase price. In a stalling market part of the judgement is if there is another party who would step in and pay the same price or would offer less.

    The lenders I worked for had the underwriting process centralised and there were not managers that had regular meetings with surveyors.

    How many times have you posted about buying a property at £20k BMV?   Now you are saying a surveyor has downvalued a property because they have valued it at £20k below what you think it is worth.  Perhaps all those properties that people have purchased at £20k below market value has moved the market values down by £20k.

    I do know how surveyors were appointed by a lender and the process for them to be instructed to carry out a valuation and doubt it has changed significantly over the years.  I am satisfied there isn’t a conspiracy or collusion between surveyors and lenders which results in down valuations.


    Thank you for adding a bit of background to your previous role

    So the valuer as I thought has the PP from the lender .

    He knew it was £86,100 in my case

     And then he values it at £86,100

    That is collusion which ever way you look at it . Its clearly not an independent valuation

    He is working in tandem with his pay master

    The chances of an independent valuer coming up with the same PP are infinitesimal

    The valuer has been heavily influenced by the PP which has been given to him by the lender

    He values it at exactly the same price . Its a transparent open collusion and nothing wrong with that

    And it is a small step from that open collusion  to all sorts of other collusion including down valuations

    If I was a lender and I feared a crash I would be sending out a message to the valuers ..

    Take it easy lads we think prices may dive 10% . We dont want a 75% LTV to soon become 85%

    We are a responsible lender so please heed that message and value accordingly

    Collusion like this is responsible. To not collude if you fear a crash is irresponsible


    Jonathan Clarke. http://www.buytoletmk.com

    There is no collusion between lenders and surveyors.

    If the lender didn't provide the purchase price then the vendor or the estate agent would.

    If a lender issued a message to surveyors to down value properties and surveyors followed the suggestion they would be in collusion and acting dishonestly and illegally.  If a lender was concerned about their exposure or the market falling then all they would need do is reduce their maximum LTV.

    You had a property down valued from £225k to £205k, that is a difference in opinion of what a property is worth and not a surveyor acting on a lender's instruction to down value it.  Many of us in the SE have seen property values fall over the last 24 months, maybe that is now happening in MK.

    Dictionary definition of "collusion" - agreement between people to act together secretly or illegally in order to deceive or cheat someone

    I said in a previous post let's agree to disagree, I think it is time to leave as that.


    I had another one valued the other day at exactly the purchase price in MK

    Generalisations dont help really though -  i am talking specifics

    The original one in question is a 240K ish property or would be after the refurb which is what the valuation was for

    225K was a perfectly fair valuation and allowed a lot of leeway . 205K was wrong

    The valuer  just  messed up or alternatively colluded with the lender to down value

    However much you want to be right  I`m afraid you are not

    There is collusion between lenders and valuers -

    They tell them the PP and in 1000`s of cases they just simply agree with that figure

    If they didnt it makes their lives so much more complicated

    More forms have to be re done and the streamline cosy paperwork process is disrupted

    Its an open secret like so many other types of collusion in big bucks industry

    The client often passively colludes as well if it suits them

    But  the courts are full of cases of exposed collisions.

    But you need a victim first or an ombudsman or a consumer rights group willing to take it all on

    Thousands of open secret collisions go unchallenged as there are just not enough hours in the day

    But when time allows or someone has the motivation they are dealt with

    You just have to look at the scandals of PPI and the endowment fiasco to realise these types of  collusions go on

    You appear blind to it for reasons i dont entirely understand

    So often  known collisions are just left until someone gets their claws into it

    Cash in hand jobs to save tax or vat are every day collusions

    Look at the VW emissions scandal with rogue software designed into it

    Look at the washing machines actually designed to fail after a few years and then the parts they offer are disproportionately too expensive forcing you to buy another washing machine and the cycle of collusion keeps going

    My Freezer though bought before all that collusion took hold  is still going 25 years on . Strange that

    Look at the MP expenses scandal where collusions took place


    It goes right into the heart of our society

    You cannot explain away this actual collusion  re the £86,100 valuation I highlighted so all you say is there is no collusion

    You never actually tackle the point I am raising head on  - you just skirt around it


    Jonathan Clarke. http://www.buytoletmk.com

    Jonathan, what collusion do you think is actually going on? i.e. what is the business strategy for lenders to contrive with the RICS to down value property if it's not to reflect the market value and associated risk in the market? The lender makes its money out of lending, so there would be no motive to down value the property and their profit other than to accurately reflect the market value.

    I really don't understand your obsession with the valuation exactly matching your offer. As long as your offer reflects the local market values, then that is the MV. What's not to understand about that?



    "Change is a prerequisite to longterm survival".

    The establishment is rigged so that the rich stay very rich, and the poor get poorer.

    I often get into a dog fight with Essex so our positions  yes tend to become entrenched

    Its a strength but also a weakness in both me  and him

    If the PP exactly matches the valuation more often than not  then that demonstrates surely  a collaboration between the two parties

    That collaboration maybe unspoken but it undeniably exists

    One Pro Property give a range in their rental band rather than a singular figure .

    They dont want to pin point it so  they hedge their bets

    Maybe valuers should look to do the same perhaps then the lender can take a view

    But as it stands they often just copy the exact PP because  of a well established industry habit

    Its not the worlds worst  crime but it shows the valuation is not in fact truly independent

    If the valuer didnt know the PP they would value it differently perhaps 95% of the time.

    So in my view there is an element of collusion , collaboration , sorting it out between themselves etc

    There are  underlying reasons for that  and I am trying to clarify and explore those reasons

    You mention two factors here being reflected

    i) The market value

    ii) The associated risk in the market

    The two elements are different entities  in my view

    The lender looks to lend 75K on a 100K property which we know say is  the MV as next door has just sold for 100K

    But if the lender fears though that the MV will dive to 80K in the next 2 years then it would be prudent to down value the same property even though its current value is 100K as their associated risk goes up substantially. If their fears were realised and  there was a 20% dip their client  would then be at around  94% LTV . That is an uncomfortable position for the lender  and there is your motive to down value as they  would have very little security then if the borrower defaults and they had to move to repossess .


    Jonathan Clarke. http://www.buytoletmk.com

    Your last paragraph demonstrates that you have no idea how an RICS surveyor carries out his assessment. Nor have you any idea on strict ethical and professional requirements for RICS accreditation, nor PII obligations. 

    I'm still chuckling to myself how you think, rather than the market being in decline due to PRA, S24 and Brexit, you instead decide that RICS surveyors are on the phone to Dave at a Lender to work out how to de-value a property in order to .... what??? I can't work out that bit.

    You're wrong, Jonathan. Admit it.



    "Change is a prerequisite to longterm survival".

    The establishment is rigged so that the rich stay very rich, and the poor get poorer.

    Lots of professions have strict ethical requirements and accreditation etc and PII obligations

    And rightly so

    Unfortunately  - and  I`m not singling out RICS or lenders here - those professional standards are not routinely always met

    The courts are full every day of organisations which have endemic problems within

     Its not specific individuals  often - its a group culture which presides  . So we cant blame Dave the lender  as an individual perhaps

    What happens though it gets to become common practice. Much of it could be for good but also bad or most cases I suspect  just simply lazy

    A valuer constantly giving the same value as a PP is just lazy .

    The  endowments mis selling, PPI and MP`s expenses etc when bad or lazy practices take hold . They creep into a system silently and unobtrusively over time sometimes gain momentum  and become passively accepted until sometimes someone  steps back and say why is that . But more often than not, neither the will nor the resources are  there to challenge effectively so the situation just continues

    If a RIC`s surveyor genuinely professionally says hand on heart that he would have valued the proposed purchase I had  at  86,100 anyway even if he had not been told the PP in advance - then  that to me is very dubious  . But by doing so it of course solves a problem for me , the solicitor, the lender , the agent etc as it means we dont have to re visit that part of the equation in the conveyancing process . So he passively colludes with common practice rather than risking sticking his neck out

    If the value was raised or lowered by  a £1000 or even £100 it means a lot more paperwork and for what .

    Down valuing protects their security  if they feel there is a crash imminent which I agree may be precisely for the reasons you state

    then they dont want it to start off at 75% LTV only for it to become 94% LTV in a couple of years due to prices falling

    Over valuing was historically and maybe still is a problem with new builds and there has been cases where collusion has been shown between RICs surveyors and developers for instance. New builds haven't found their 2nd hand value yet so the temptation is to value them at 5% higher for commercial reasons

    I recall talking to an investor in Liverpool years ago who had bought 2 new build flats for 160K and was shown a RICs valuation to evidence it  . 2 years later they were half that value and only part caused by 2007 crash but more because he had been duped by an alleged collusion between developer / lender/ valuer etc

    Question  arising then......

    1) Should a valuer for a lender value a property at the value that they perceive it to be it is on the actual day they value it. And in doing so show say 3 com parables if available  to evidence that valuation

    Or .

    2) Should they value it for its potential projected value say 2 years down the line  and then comment on the reasons for down valuing it producing economic BOE statistics maybe to back their valuation up .

    If the latter they become much more than a valuer in my view as they have or need to have an additional  skill set in forecasting  economic trends . They may comment on supply and demand locally in real time but its another ball game as to what lies 2 years down the line


    Jonathan Clarke. http://www.buytoletmk.com