Releasing equity

[r16chh]

Hi,

I am trying to get some equity out of a property but I have hit a snag with my lender.

They will only lend the extra if I can get comparables, which I am struggerling to get due to no agents in the area having any.

They also want 3 months proof of rent which as I have not got anyone in as of yet I cannot provide.

The tenant I am looking to put in there is willing to pay the amount of rent needed, but as I have no evidence, where do I go from here.

Any thoughts.

Cheers

Richard

[GPEL]

Are you looking for rental or sales comparables? PM me the post code & property type & I'll see if I can help. Other lenders may have different criteria.

[Gee]

Are you appealing against a valuation carried out by the lendors surveyor or do they want this info before they will consider your application?

Gee

[r16chh]

Thanks for your reply. Yes its against a lender valuation, but more so against the rental figures they have quoted.

Cheers

Richard

[Gee]

I rather it was!

As a Building Society surveyor, it might help if I explain the Lendors position and what you need to succesfully challenge the valuation.

A properties value is what the market is prepared to pay, not what the owner thinks it is worth. In forming an opinion of value the surveyor has to take into consideration sale prices of three similar properties in the area and/or uses a rate £ per sq metre based on the sales of 3 similar properties in the area. This allows for properties that are bigger/smaller than the comparables.

The same requirement is needed for the rental figure.

In order to successfully challenge the valuation you will have to provide the same level of comparable as the surveyor. It is no use sending sales particulars of houses on the market for sale and rent, The surveyor needs actual figures that have been achieved or agreed, his hands are tied otherwise, because he will be audited and also runs the risk of being sued by the lendor (or yourself) if the valuation is wrong!

Obviously, you think your property is worth more and you have to have to ask yourself is this based on sales of property in the area or wishful thinking? I am playing devil's advocate here. If the answer is the former you don't have a problem, if its the latter ....

From a practical point of view, look at sale prices achieved on Rightmove, ask local estate agents, although as you have found out they often don't want to release this information because it is confidential. However I do find Letting agents more forthcoming, again look on rightmove for properties to rent and then phone the agents particularly where a let has been agreed, Most importantly you need the house number, sale/rent agreed, date and name of agent if this is to have any effect on the surveyor.

If you can't get any of these, you could pay for an independant valuation by your own Chartered Surveyor, this will cost money and you run the risk that it won't value up. A "valuation" by an estate agent will not be accepted because they are not independant and not qualified. This is a last resort and I would discuss the valuation figure with the surveyor before instructing him.

Most surveyors are not unreasonable people and are happy to change a valuation if they are satisfied that the new comparable evidence is genuine and that there is a solid base for your argument. Don't just send a load of sales particulars for any old property on the off chance something might stick, it won't and you need the surveyor on your side not suspicious of your appeal.

Good Luck - lets us know how you get on.

Gee