100% Retention Of Mortgage Funds

[xux42]

Lenders don't periodically re-value properties mid term, as far as I'm aware.

Well they could and they may well do if they get desperate enough and survival becomes a higher priority than reputation - have you see the RBOS and B&B share prices today?

Anyway, re-selling renovated properties in a falling market must be damned hard work even for a well connected experienced expert who knows all the wrinkles - must be easier ways to make a living surely? Or is it really fun?

[6538]

Well they could and they may well do if they get desperate enough and survival becomes a higher priority than reputation - have you see the RBOS and B&B share prices today?

I have to disagree with you here because I'm not sure they can re-value mid term. Perhaps at certain pre-designated points in time throughout the term of the mortgage but I doubt they can just decide to do it tomorrow and go ahead with it. Besides, how would they if their valuer cannot get access to the property to survey it? They cannot just guess at a valuation.

Has this even happend to anyone yet?

Anyway, re-selling renovated properties in a falling market must be damned hard work even for a well connected experienced expert who knows all the wrinkles - must be easier ways to make a living surely? Or is it really fun?

It depends upon the property, where it is, what you've paid for it, what it's cost to do up, etc.

To be honest though, I'm not sure that it's much more difficult today. In the recent strongly climbing market you have had the added complication of lots of competitors for each property who are all too willing to out spend you to buy a property because they have access to more credit and are using the rise in the market to insulate them on each deal. In these circumstances it's just as easy to overspend against these guys and make nothing on it.

Ok, today the market is falling but there are far fewer people about who want to buy renovation projects, primarily because they can't finance them to the hilt and FTB's are so scared of buying anytihng needing work then they are out of the picture too so there are some good deals starting to come about if you have a bit of deposit money.

Making a few quid is always hard work and yes, it is fun - to a degree.

[Paddles]

Depends what I'm paying for it though.

Oooh! Get that! BMV still exists!

Looking forward to the margin calls in August.... that don't exist. Black Swans don't either*

*if you are a European prior to the discovery of Australia.

[6538]

Oooh! Get that! BMV still exists!

I take it that stands for "Below Market Value"? There is no such thing if you have bought on the open market. If it has been fairly advertised then what you are paying for it is, by definition it's market value.

Fact of the matter is though that today the difference in value between a property which needs work and one which is immaculate is more pronnounced than it was 6 months ago. Far fewer lenders are prepared to lend on them and the ones that will are not giving big LTV's. Also, FTB's are reluctant to buy something which is in need of work because spending a lot of money on a basket case scares them, even though it's the best way to get up the ladder quicker.

Renovating small FTB suitable properties (which usually means older terraced flats round this way) is really the only place where you can make a few quid in developing at the moment.

[Guest DissipatedYouthIsValuable]

I take it that stands for "Below Market Value"? There is no such thing if you have bought on the open market. If it has been fairly advertised then what you are paying for it is, by definition it's market value.

Fact of the matter is though that today the difference in value between a property which needs work and one which is immaculate is more pronnounced than it was 6 months ago. Far fewer lenders are prepared to lend on them and the ones that will are not giving big LTV's. Also, FTB's are reluctant to buy something which is in need of work because spending a lot of money on a basket case scares them, even though it's the best way to get up the ladder quicker.

Renovating small FTB suitable properties (which usually means older terraced flats round this way) is really the only place where you can make a few quid in developing at the moment.

Most 35 yr old FTBs are getting beyond wanting a terraced flat. Hey ho. Good luck.

[Paddles]

I take it that stands for "Below Market Value"? There is no such thing if you have bought on the open market. If it has been fairly advertised then what you are paying for it is, by definition it's market value.

Fact of the matter is though that today the difference in value between a property which needs work and one which is immaculate is more pronnounced than it was 6 months ago. Far fewer lenders are prepared to lend on them and the ones that will are not giving big LTV's. Also, FTB's are reluctant to buy something which is in need of work because spending a lot of money on a basket case scares them, even though it's the best way to get up the ladder quicker.

Renovating small FTB suitable properties (which usually means older terraced flats round this way) is really the only place where you can make a few quid in developing at the moment.

You may be right but then again, maybe all those gains folk make in the before and after valuations when people "do up" properties can all be explained by a rising market. The boy/man differentiator will be if you can renovate a property and flog it for costs+margin in a falling market.

If you've got that cracked, I'll buy shares in your company when you float it as you'll have the old lead to gold trick sorted within no time.

Everyone's a DIY expert in 2008.