Property risk assessment
With over a decade worth of experience working with lenders, we have the knowledge required to provide reassurance on or highlight any risks or concerns.
Having reviewed thousands of properties over many years and with experience over a huge range of properties, our team can provide comfort to lenders (and their funders) on asset risk by visiting properties prior to origination and critiquing valuations to highlight any risks or concerns.
Sometimes known as valuation auditing or loan risk assessment, we can provide reassurance on asset values by inspecting properties before you complete a new loan transaction, combined with an objective assessment of the valuation based on our own findings, research and analysis.
We will provide you with concise written reports, including pictures, and where required an in depth analysis to highlight specific issues.
Bridging or term lending
Additional due diligence to provide you with the comfort you need, without sacrificing the speed and flexibility required to maintain high service standards. Where appropriate the methodology is dissected and cross-referenced in order to identify any disparity, drawing on years of experience analysing complex valuation structures where different methodologies are brought together and blended to reach a valuation conclusion.
When assessing a residual valuation we’ll ensure that all allowances have been accounted for and that each allocation is within an acceptable range. When calculating a residual valuation it’s inevitable that assumptions are necessary to reach a conclusion, however even marginally optimistic GDV’s and build costs can have significant consequences on your LTV. It is imperative to understand these tolerances and stress test them to evaluate how the proposed LTV responds. We have developed a model to help us understand the sensitivity of a proposed development loan and can use this to help structure the loan safeguarding that an acceptable LTV is maintained.
Disaggregated versus aggregated values
Occasionally we see valuations that rely upon the break-up of the security to reach a conclusion on the value. However the option to break-up for recovery purposes may not always be commercially viable, and it is critical to understand any disparities in order to confirm your valuation figure is aligned with the likely disposal route. For example, where 4 flats are within a single freehold block there are a number of aspects to consider. These considerations include queries such as: can the titles to the flats actually be broken up; are they self-contained; would the local market be impacted if several flats are offered simultaneously; how would the timescales work in practice, etc.
Given our expertise in the specialist lending market, we recognise how important our service levels are in helping you to provide fast funding solutions to your clients. With this in mind we strive to deliver a fast turnaround, enabling you to be both responsive and confident in your decision-making process. We often find it can be beneficial to meet your credit team in person and would be happy to come in and explain how we work, listen to any concerns or queries and make sure that we adapt to your way of working, ensuring that we are tuned in to your lending risk appetite.
Some lender clients have requested that we present to funding providers or engage with their investors, and we are very happy to oblige if required.
Types of property loan that we can offer Risk Assessment Reports for include:
- Standard Bridging (Residential/Commercial) – reassurance you need on the asset’s valuation, with an impartial expert view on the methodology used and any risks you need to be aware of.
- Term lending (Residential/Commercial) – some specialist lenders offering longer term loans still prefer the added confidence gained through an independent site visit prior to completion, particularly for unusual properties or faster transactions where DD is conducted quickly.
- Refurbishment (Light/Heavy) – can be tailored to align with your own lending criteria, so that you maintain visibility as the works progress, cost-effectively and without sacrificing control.
- Development Finance – objective, residual-based calculation of the project risk and loan structure, to ensure you lend within your firm’s credit risk appetite.
- Drawdowns during building works – confirmation of project progress prior to releasing funds as the scheme gets underway, protecting your exposure at all times.
- Monitoring visits mid-term – provides comfort on the value/condition/occupancy of asset and can form part of covenant monitoring or ‘First Line of Defence’ risk management for Banks.
- Desk Top – where speed/cost is the priority, or you consider the loan to be very low risk.