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I have an HMO that I want to refinance. The surveyor has valued it at £95,000. This is the same price as a tired BTL house sold for in the same street 6 months ago. He has valued it as bricks and mortar. The tired house would bring in a gross rent of £6,600. My HMO done up to a very high standard brings in rent of £26,520. I was hoping for a valuation of at least £150,000.
What has really annoyed me is that because the valuation is below £100,000, Precise won't let me have a mortgage. I've appealed and given 3 comparables of HMOs in the same post code that have all sold for around £150,000 in the last 6 months. As expected, the surveyor refuses to change his mind. I would have accepted a valuation of £100,00 as a minimum but he cannot even bring himself to value it at that low amount. Surely a fully refurbished HMO (I spent £60,000 doing it up) is worth at least £5,000 more than a tired similar property that has had nothing spent on it. Surely the huge discrepancy in rent means it should be valued at least £5,000 higher than the comparables he's used.
To cap it all the HMO next door which is far inferior sold for £140,000 in 2015.
I want to complain about this surveyor. I am fully prepared to do whatever it takes to pursue the matter.
Any advice would be much appreciated.
Try a different lender: After advice from a whole-of-market broker.
I'm going to do that if all else fails. However I am very unhappy with this surveyor and as a matter of principle want to complain about him as he seems to be taking a non refundable fee for not doing his job properly.
Wise advice Phillip.
"He has valued it as bricks and mortar"
Precise Mortgages only do bricks and mortar HMO valuations, like most HMO lenders.
"same price as a tired BTL house sold for in the same street 6 months ago"
A lick of paint does not add value. As above they do not take the "HMO" element into consideration. The valuer valued it as if it was going to be rented on the same basis as the one sold six months ago. With a comparable being sold six months ago (even if it needs a lick of paint) that adds more weight.
"because the valuation is below £100,000, Precise won't let me have a mortgage"
That's a shame, it is £50k outside of London but £150k within.
"I want to complain about this surveyor"
When irate clients have looked at doing this before, we were told that the surveyor was instructed by the lender (not you). Therefore they can not address the complaint. Ouch!
Try a different lender
Not all lenders have a £150k minimum valuation within London. So you can look at another HMO lender who will consider it on bricks and mortar.
Though there are a minority of those that will do a commercial valuation too. They are always mindful of the B&M value but maybe worth a try.
Would be happy to assist at Bespoke Finance on 01133203240 we specialise in HMO Finance.
_________________________________________________________________________My posts are not financial advice, just a rambling guy passing time on a coffee break.The team at Bespoke Finance offers advice, including Limited Company Buy-to-Let , HMO Conversion and Cheap Life Insurance._________________________________________________________________________
Hi Michael,There has been a lot in the media of late about surveyors acting very cautiously and down-valuing properties.See - Insights: Lender's survey & down-valuationsI can only assume that he was not happy with a commercial valuation, and acted very cautiously when giving a bricks n' mortar val. I understand your frustration!I am struggling to see how you can complain, because you did not have a contractural arrangement with the surveyor. He was employed by the lender.I would not waste your energy pursuing this.Can you not apply to another lender and try again to get the valuation you need, perhaps preparing a pack of comparables to hand to the valuer to help him with his decision?The PT Brokers team, who are whole of market, would be pleased to assist you find the right lender. They can be contacted on 0333 363 3607.
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
Thanks for the advice Vanessa.
I was there when he did the valuation. He said unfortunately I had used Precise who only consider bricks and mortar valuations. I told my broker who spoke to Precise and they said this was not the case. They say they are a specialist HMO lender.
I can live with a bricks and mortar valuation. What I can't live with is the surveyor valuing my HMO at the same price as a much inferior house on the same street and ensuring I lost my money as he didn't at least value it at £100,000.
Worst case scenario could I not take him to the Small Claims Court?
Sorry, but I don't see what your case against him is. He will stand his ground and say that he acted within professional boundaries. You have not "lost" any money, his decision just affected your ability to access your equity.I think your beef is more with the lender tbh. You could make an official complaint and ask them to send out another valuer at their expense, as the original valuer was clearly not understanding that they were a specialist HMO lender who accept commercial valuations. They should send out valuers who understand their criteria to ensure that clients get a fair valuation.
I can show comparable sales of HMOs in the same post code in the last 6 months at around £150,000. I can show comparable HMOs that are currently up for sale in the same post code for similar amounts some of which are sold subject to contract.
I've been told by other friends in the HMO world that this particular surveyor has done a similar thing to them. It doesn't seem to matter who the lender is. He seems to be vindictive towards HMO owners.
I blame him far more for the situation than the lender so want to pursue him. I think I would easily be able to convince a judge in a Small Claims Court setting that I have been wronged. I just wondered if it is possible to pursue him that way if all else fails.
Personally, I don't think it is a good use of your time and energy to pursue him and I don't believe you have any case against him. I would recommend dropping your anger at him and focus on getting your refinance. I know its infuriating, but all part of being a landlord! You will come across a surveyor down the line who gives you a better valuation than you expected. It is swings and roundabouts!I have contacted Alan Milstein, who is Chairman of the Residential Property Surveyors Association and a PT member, to comment, so I hope he may pop along and give his view on this.
Thanks Vanessa. I’d be very interested in his views.
I know pursuing him is probably not a good use of my time but I feel a point of principle is at stake here. By any logic I can muster the very least he should have valued the HMO at is £100,000 so I could get a mortgage. I resent paying the valuation fee and jumping through many hoops to get to the point of a valuation only for him to be vindictive as I see it.
At the very least I want a £100,000 valuation or my money back. I’ve been to the Small Claims Court before and feel I would easily win so I’m quite happy to do that. Even if I lost I wouldn’t be that bothered as at least he would have had the inconvenience of having to defend himself. He might then be more reasonable in the future for other HMO owners.
Very interesting thread- I hadn’t realised that mortgage companies will value a property based on HMO income! I am amazed. I hope you get some restitution. I wonder how much longer a surveyor will be required? Data prediction is pretty finely tuned now!
Btw what do I need to do to get an HMO valuation?