The Methods
When it comes to having your HMO valued, there are two methods – Bricks and Mortar and Commercial. Which method you choose is entirely subjective and based on a lender’s criteria. Things such as the Planning Use Class, your mortgage lender, which surveyor has been chosen and location are all taken into consideration when deciding between a Bricks and Mortar Valuation and a Commercial Valuation.
Bricks and Mortar Valuations
These types of valuations are the most common type. If the property is a single C3 dwelling and is based on fair market value and local comparables then they are commonplace. Surveyors work to a standard criteria based on factors such as the size, number of bedrooms, location, condition and comparable properties in the area. Zoopla Markets have a great tool to give you an idea of what your property would be valued at.
Commercial Valuations
This type of valuation is less common. It’s used by lenders who offer commercial or yield-based valuations. These types of valuations are typically higher than a Bricks and Mortar Valuation. Again, properties are valued against a criteria of factors such as comparable properties, Planning Use Class, size, number of bedrooms or units, Article 4 Directive, HMO density in the area, management and of course location. The calculation model is based on rent, operating costs (usually between 15% and 35% but the is surveyors’ discretion) and the local yield (again, this is surveyors’ discretion).
The Bottom Line
Whether you’re looking to sell or remortgage your property, it’s key to ensure that it’s looking it’s best. Things like staging, refurbishing the property if it’s looking a little tired and making it feel like a great home for people always go down well.
Valuation Packs
Valuation packs can be a little marmite, but we think that they’re worthwhile. Here’s a list of what we’d suggest putting in your valuation pack.
HMO Licence Certificate
Floor plan
Before and after images
Planning certificate
Building regulations certificate
Tenancy Agreements
Fire Risk Assessments
Fire Alarm Certificates
Electrical Safety document
Warranties. Boilers, appliances etc.
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