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I represent Graham and Sibbald. This brief talk is to focus on one of my main areas of expertise which is residential valuation.
I am an elected member of the RICS, which means I am one of a select group in the world who is qualified to say I am a Chartered Surveyor. As I’ve said before, many people have asked me why I chose to become a member of the BNI. I work for G+S whom I believe are the best practice of Chartered Surveyors in the country, bar none. Established nearly 50 years, with a solid reputation for providing reliable and expert advice on property related matters, with a strong affiliation with all the major lending institutions in the UK. There is no other practise I would wish to work for. For that reason my goal is to progress onto the Partnership of G+S, in order to do that I want to develop more business and enlighten those of you who do not already use G+S of the work we do, which are the main reasons I am here today.
The Partnership operates from a network of 14 offices across the UK and has 26 Partners, 25 Associate Partners, a total complement of over 200 employees. The Practice offers a complete range of Property Services including Agency, Building Surveying, Licensed Trade & Leisure, Development Planning, Petroleum & Roadside, and Residential & Commercial Valuation.
GRAHAM & SIBBALD’S client base is extensive with work being undertaken on behalf of both the Private and Public Sectors to which we as a Firm are determined to offer a first rate professional service, based on the unique combination of local knowledge with the specialist support and a national network of offices.
I am based in our Hamilton office, where I have been for over 5 years. My area of expertise extends to the whole of Lanarkshire from Biggar to Rutherglen, Strathaven to Shotts and everywhere in between. Although I am a general practice surveyor, my bread & butter, is Residential Survey and Valuation.
I have provided you with our Guide to House Surveys Leaflet which outlines the various types of inspection we carry out. In general, the two most common are the Scheme 1 Mortgage Valuation and the Scheme 2 RICS Homebuyers Survey and Valuation.
The main points to note is that:
1. the Scheme 1 is not a survey but merely a valuation inspection used as a guide for lenders on the value of a property for loan purposes and only significant visable defects are reported.
2. the Scheme 2 is a detailed report on the condition of a property and involves a more indepth and time consuming inspection with detailed inspections of the roof void and sub floor areas.
There are a number of key factors which we consider in preparation of our valuation advice namely:
1. LOCATION
You’ve all heard the term Location Location Location, Location is the most important factor when assessing the value of a property. The proximity of local amenities, employment, shopping and transport links. School catchment zones play a significant impact in a purchasers decision and the resultant demand and value of properties.
On the other hand the marketability of a property can be adversely affected by the proximity of a railway line, electric pylons. Many lenders may not provide mortgage facililties over flats situated above commercial premises in particular public houses and hot food take aways, this limits a purchasers options for funding and as a result has a detrimental affect on its value as a security.
2. DESCRIPTION
When I say description I mean house type and construction. In any given location a detached house will be valued more than a semi detached house, an end terrace will be valued more than a mid. The differential between say a 3bed semi and a 3 bed detached can often be in excess of 20% in value terms.
Verifying the construction of a residential property is a very important part of a valuation inspection. It may sound straight forward but it can often prove very difficult. There are two categories of construction: Traditional and Non-traditional.
Traditional construction is solid stone, cavity brick or timber framed with a brick outer leaf, which are considered suitable as a security for a mortgage.
However there are hundreds if not thousands of properties in Scotland which are non traditional of various types ranging from no fines concrete construction which most lenders will accept to steel framed houses which many lenders may not accept and precaste reinforced concrete houses which are deemed by law as being defective and not suitable for mortgage purposes and have a nil value as a result.
3. ACCOMMODATION
After considering the location and the type of house the third factor which we consider when preparing a valuation is the accommodation. People pay for bedrooms.
Contrary to many of these tv programmes giving your house a coat of paint and adding, say, a utility room will not add £10,000 to the value of your property, that is complete nonsense. Issues such as decoration is a matter of taste, it may help to sell your house quicker but I am involved in house purchases every single day and I can tell you the market would be willing to pay exactly the same amount of money for 3 bedroom house needing a bit of money spent on it in maintenance terms as the same 3 bed house which has been recently decorated. The majority of people when buying a new house will redecorate to suit there own tastes no matter what.
So many people when I go out to prepare a valuation for remortgage say things like “I think my house is worth £150,000, I mean the one across the road just sold for £130,000 but mines is better than theres”- says who?
4. CONDITION
Don’t get me wrong the condition of a property is considered when preparing a valuation particularly where further investigation is required by a third party.
For example damp related defects are very common especially in properties built in excess of 50 years ago. This may be just a condensation related problem where the quality of heating and ventilation is poor or it could be a defective or lack of a damp proof course. As a matter of course we will, where possible, carry out a moisture test during the course of the inspection. Where damp is found in a property the value of the property will be subject to a thorough investigation from a timber/damp specialist and necessary repairs being carried out.
The other key factor with regard to condition is Structural Movement, many older properties have suffered settlement in there time but there are often cases where this movement is progressive and may have occurred, for example, due to the removal of mature trees around the property. In that instance the value would be subject to a Structural Engineer being satisfied with the structural integrity of the building.
CONCLUSION
From 2001 until recently the demand for houses in Lanarkshire was outstripping the supply particularly for good sized family accommodation and together with very low interest rates this resulted in substantial increases in the value of houses.
During the course of the past year however, the market has entered a more balanced state. Many of the new build sites in the area are offering significant incentives in order to shift there stock this in turn is having a detrimental affect on the sale of second hand properties with many purchasers choosing to buy the new property where discounts and cash back incentives are offered.
On the other hand the lower end of the market is very strong at the present time. Many first time buyers have entered the market possibly due to the indication of a slow down in the market, however this has created competitive conditions among themselves for one/two bed flats and 2/3 bed semis and ex council houses. With the increased demand and low supply of this type of property, has come increased property values. The increased stamp duty threshold in recent times from £60,000 to £125,000 has also had an impact.
I hope this has enlightened you on the breadth of expertise we can provide at G+S and in particular gives you an idea of the factors considered when providing a valuation for mortgage. If you have any further questions please do not hesitate to contact me.
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