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28 January 2010 | News
Buy-to-let valuations – clarification of policy where remedial
work or repairs are required
Current C&G lending policy states that a
buy-to-let property must be in good condition and in a reasonable
state of repair. The following guidance is to give a clear
definition of what is considered 'good condition'.
Valuers will use the following standard phrase
in their valuation report for buy-to-let properties:
- 'The estimated rental value is based on the present
condition of the property'
The ‘present condition’ figure must be
sufficient for us to lend and therefore, there must be:
- no major works required (these are defined as dry rot, drainage
defects or ongoing structural movement)
- no repairs needed that the Valuer considers essential for
mortgage purposes
- no repairs or modernisation required where the Valuer estimates
the cost to be more than £5,000.
Where any of the above apply, buy-to-let
properties will not be recommended as suitable for mortgage
purposes. There is no referral to Underwriters available in any
situation.
The estimated cost of repairs will be
determined by the Valuer and no estimates will be accepted from
customers.
The case will also be declined if the Valuer
states that repairs must be carried out before completion or are
necessary to increase the value to enable us to lend. Again, there
is no referral to Underwriters available in any situation.
A lending recommendation of 'Yes - when done'
cannot be provided for buy-to-let properties under any
circumstances, so there will be no occasion where reports are
required.
If the Valuer gives a 'No' recommendation,
neither an estimated rental value nor a market value will be
provided in the report.
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