A South Yorkshire property lawyer is warning landlords not to rely on mortgage estimates of the rent it should realise, when deciding whether to buy a property.
James Murray from Atteys Solicitors says a recent court ruling means that would-be landlords have to make sure the price is right, regardless of the valuation that their mortgage lender has obtained:
“If you’re buying a house or flat to let out then you are expected to be more commercially astute than someone who simply buys a house to live in. You need to research rent levels, terms and fees, before buying, because you, not the mortgage lender, are seen as responsible for the accuracy of this valuation,” said Mr Murray.
He spoke up after a landlord took his bank to court because, when lending him money to buy a property, the potential rent estimated was much higher than the landlord was able to achieve.
“The landlord lost the case because the judge decided that, as an investor, he should not have relied solely on the mortgage valuation in making his decision.”