Shawbrook Bank’s commercial mortgages division has unveiled a new HMO valuation methodology for its broker partners.
It said the move was in response to the lack of clarity in the sector around valuation of this property type.
Shawbrook’s new methodology will provide guidance to brokers, valuers and customers on what value the Bank will lend against on different types of HMOs. As part of Shawbrook’s dedication to clarifying its lending guidelines, the methodology outlines four new HMO definitions to help brokers and their customers gain a better understanding of Shawbrook’s valuation process.
The four definitions categorise HMOs using a range of criteria, including the size of the property, the level of works planned, whether there is an Article 4 in place and the significance of the changes to the fabric of the building.
Shawbrook continues to view each case on an individual basis.
Karen Bennett, sales and marketing director for commercial mortgages at Shawbrook Bank, said: “HMOs are notoriously complex to value, and yet there is little in the way of support for brokers on the issue. In response to this, we ran a number of seminars with more than 100 valuers to gather their views and ensure we gained an appreciation for the different options for HMO valuation across the country.
“The end result has been the launch of our new HMO valuation methodology, which we believe is the first time this complex issue has been truly defined by a lender. At Shawbrook we’re always looking to improve our offering, and we are confident that greater clarity and transparency around our guidelines will add value for both our broker partners and their clients.”