Speaking about the progress of cladding at the Mortgage Solutions Buy to Let event, Lee Dennett, regional surveyor at Paragon Bank, said more had been replaced in the last 12-18 months and it was now happening “quite rapidly” after a period of “nothing happening”.
He said the problem was costs were being pushed onto leaseholders through higher service charges.
When it came to remortgaging their portfolios, Dennett said he came across landlords who initially purchased cladding-affected properties with cash and had been “getting a discount”.
Dennett said: “As the market has developed, they’re probably getting [cladding-affected properties] 20% or 25% lower than what the market value would be.
“Some landlords who have got cash are just going out there and mopping up in anticipation that the cladding’s going to be removed and they’re going to do well with it in the long run.”
It should be ‘hard’ to appeal valuations
During a presentation before the panel discussion, Jason Wilde, national sales manager at Paragon Bank, spoke about the process of appealing a valuation.
Wilde said brokers should put any appeals “firmly in the borrower’s court”, adding: “Unless you can stand there and say ‘I know what this property is worth, I know full well that this is a down valuation of a property’, you’re potentially putting your name next to something where you’re relying on your borrower’s opinion”.
He shared an experience of a broker who appealed a valuation that was based on a guide price, after the seller rejected an agent’s original lower valuation. The property was put up for sale, then taken off the market. The closest comparables to the property were still on the market, so there were no confirmed sale prices. Wilde said this left the broker “embarrassed” because he was relying on the borrower’s word.
“If a surveyor has done their job properly to start with, then it should be naturally quite hard to appeal a valuation. Because they’ve got all their comparables and are using local market knowledge… it should be quite difficult to appeal,” he added.
He said surveyors were happy to engage with brokers, but it should be hard to change their decision.
