News and Blogs

10 December 2019
An in-depth guide to loan security valuations

To successfully secure a loan from a bank or financial institution you may be asked to use your commercial property as a form of security.

The purpose of a loan security valuation is to determine how much money can be secured against the property’s value.

In this guide we’ll examine why it’s so important to get an accurate and comprehensive report for your commercial property.

What is a loan security valuation?

A loan security valuation is a detailed report which allows banks (and other money lenders) to make a better informed decision about whether a loan should be issued and how much they could lend you safely.

It assesses the risks involved and whether the lender could realistically recoup the amount should you default or be unable to repay the loan.

It is NOT necessarily equivalent to the value of your property if it was to be placed on the market for sale or to let.

Who can complete a loan security valuation?

If you’re keen to raise some capital and need a loan security valuation, it’s essential to use an experienced and RICS-qualified chartered surveyor.

Reputable money lenders will ONLY consider a valuation report which has been prepared in accordance with the Royal Institution of Chartered Surveyors’ (RICS) Red Book guidelines and by an RICS Registered Valuer.

At Garness Jones, our dedicated team of loan security valuation experts have worked throughout the Hull and Humber region since our formation in 1996.

The fact a chartered surveyor is validated by RICS gives you complete peace of mind because you can be sure the process they go through to arrive at the value figure follows the RICS standards that are recognised around the globe..

When weighing up who you want to conduct your report, try to find a company with extensive local knowledge for a broad range of property types – including portfolios and a mixture of private, investment and operational properties.

In the event that something should go wrong, an RICS-qualified chartered surveyor also has professional indemnity insurance offering legal protection.

What’s included in a loan security valuation report?

At Garness Jones, we’re proud to carry out loan security valuations on behalf of high street and merchant banks, building societies, brokers and accountants.

Our assessments are always prepared in accordance with the RICS Red Book valuation for secured lending purposes.

We also compile reports which are as jargon-free as possible on behalf of lenders for residential and commercial property or land.

Set out clearly and concisely, each valuation includes the following information:

·        Property location and inspection assessment

·        SWOT analysis of property

·        Condition and quality

·        National and local market commentary

·        Sector-specific market commentary for conditions in that area

·        Supply/demand for your specific property type in that area

·        Amount of income derived from property

·        Whether tenants are reliable

·        Whether property is sustainable over loan period

·        Environmental matters - contamination, asbestos etc

·        Planning permissions in place which may affect future value

·        Potential for alternative use

·        Energy efficiency levels

·        Value on the applicable valuation date

·        Methodical reasoning in relation to valuation approach

Why choose Garness Jones for a loan security valuation?

As appointed panel valuers for many banks, building societies and financial institutions; Garness Jones can provide residential, and commercial property loan security valuations.

Having undertaken thousands of assessments, our experienced RICS-Registered Valuers possess industry-leading knowledge covering multiple sectors in the Hull and Humber region.

Our robust and transparent valuation process is conducted by an approachable team which knows all the intricate details associated with agency, investment, planning and development.

We appreciate how important an accurate valuation is to the future profitability of your business – and will work fast and efficiently to meet your deadline.

Whether you need to asses a complex development, mixed use scheme or single property; we have the insight required to satisfy all your compliance requirements.

To put our strong reputation to the test, email info@garnessjones.co.uk or call 01482 564564 to discuss your loan security valuation requirements.