How are LTV ratios worked out?

Albee

Please excuse my ignorance but I am trying to figure out my LTV ratio as I need to remortgage soon if possible (with NR at present).......

Does any one know how valuers work out the value of your property - is it simply based on what other properties on your street / road have sold for? If so how do they account for change in prices in a falling market?

lisyloo

hello,

They will pay a valuer who will have local surveyors in the the area.
There are several ways they can do it depending on what the lender required.
Often they will visit you home and inspect inside and out.
Occassionally they just do a "drive by" and sometimes they just work from behind a desk.
They can use prices of houses near by.
In a falling house price situation they can use indices.
For instance the land registry publish figures on a regular basis.
So if your neighbour sold last year and house prices in your area fell by 8% then they can simply apply that figure.

At the moment valuers are valuing on the low side and are being cautious.
In a rising market it doesn't matter so much if they get it wrong, but at the momnet, there is risks involved and individuals don't want to make a mistake and risk thie job so they are definitely being cautious.

You can look at sites like https://www.nethouseprices.co.uk to get actual sale prices in your area.
If there haven't been any then it's more difficult, but there are various methods (local papers, estate agents, paying for a valuation).

Albee

Thanks lisyloo - much appreciated!

Any idea where I can get info on how much house prices have fallen in my area?

lisyloo

http://www.landregistry.co.uk/assets/library/documents/251208.pdf

This report shows actual sale prices (much better than asking prices) to September 2008.
The national figure is -8% but it's also broken down by county.

These figures are much better than ones from the Halifax or Nationwide because these are based on real sales.

The only slight problem is that it's a little out of date.
It will only include completed sales, so offers made in the last few months won't be included unless they have completed.
As such it's probabably around 3 months out of date.