Case Study

Market Valuation for Secured Lending Purposes

Valuation of a 3 bedroom flat within a modern block in Kensington for secured lending

Instructions were provided by a private bank to provide RICS “Red Book” compliant market valuation advice for secured lending (further advance) over a loan term of 5 years on the following bases;

1) Market Value of the leasehold interest, as at the date of valuation (date of inspection) based on a 6-month marketing and sale period and assuming full vacant possession

2) Market Value of the leasehold interest, as at the date of valuation (date of inspection) based on a restricted 3-month marketing and sale period and assuming full vacant possession

3) Indication of current Market Rental Value assuming property let in current condition on standard 12 month Assured Shorthold Tenancy and to include the unallocated right to park space

A site inspection was undertaken with descriptive analysis as to the condition of the property, comments regarding the local surrounding area and measurement of the property in accordance with RICS Property Measurement (2nd Edition).

The subject property comprises a tenth floor self-contained lateral apartment forming part of modern purpose-built residential block constructed in 2014. The development had the benefit of residents-only gymnasium with swimming pool and spa, residents’ cinema, business centre, 24-hour porterage/concierge, CCTV monitored secure car park, a series of Mitsubishi passenger lifts (of the 14No. person / 1,050kg capacity) and on-site management office.

The subject flat was arranged as 3 bedroom, 3 bathroom accommodation extending to 1,575sqft and was presented in very good order. The property was held on a 999 year lease.

Due diligence was completed with regard to general planning enquiries, council tax, obtaining full lease and ground rent details, undertaking a flood risk assessment and procuring an EPC from the on-line register.

Comparable evidence was then gathered using our online subscription portals together with Land Registry records and engaged in conversations with a range of local agents dealing in both sales and lettings.

The property was located on a high floor and very well-presented however the demise did not include any outside space and its aspect was slightly compromised as views were principally over the railway line. Comparisons and comments were made between the subject property and the collated evidence.

The valuation report was then issued with the three values as set out in our original instructions. A rationale was provided alongside the valuation, giving explanation to our analysis in the light of current market conditions and recent transactional evidence of both sales and rental