At the National Association of Commercial Finance Brokers (NACFB) Commercial Finance Expo 2018, fears were raised that valuers and lenders’ valuation processes were not sufficiently robust to deal with the raft of changes hitting the sector.
Speaking at the expo, Mortgages for Business CEO David Whittaker (pictured) noted that the new legislation controlling Houses in Multiple Occupation (HMOs) would be a particular concern.
“One thing to note in Scotland that we are not yet feeling down here, is they’ve been much tougher on HMOs historically,” he said.
“Of course a whole new load of HMO legislation lands in England and Wales on 1 October and I think we’re going to have to scramble somewhat to get the valuation community and our underwriting teams to the line on these new HMO rules.”
The government published its rules for HMOs yesterday.
Energy efficient valuations
Concerns were also raised about how lenders and their valuation teams were dealing with the tightening of rules about the energy efficiency of rental properties.
Paragon Bank director John Heron said: “From our experience, individual cases where there are substantial challenges over the energy rating are very limited.
“As far as new lending is concerned, the issues need to be resolved up front through a robust valuation process.
“In that respect I think there is some work for the industry to do because I think generally valuation process are not detailed or robust enough and we need to provide a better standard of advice to our landlords when we’re taking a property on.
“And that should include a view of the let-ability of the property as it relates to the energy rating,” he added.