Do vacant or tenanted properties yield higher or lower valuations?

Do vacant or tenanted properties yield higher or lower valuations?

11:25 AM, 12th January 2016, About 7 years ago 7

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I remember an agent explaining there is a difference in a valuation if the property is tenanted or vacant at the time, but I can’t remember which yielded the higher and lower valuation. bruce

Can anyone please advise,

thanks in advance



Anthony Endsor

11:49 AM, 12th January 2016, About 7 years ago

In terms of the valuation of the property, it will go on the condition of the property whether it is tenanted or not.
As for the rental valuation, the valuer will assess it based on the property and will assume the tenant is paying the rate of the valuation if it is tenanted.
The slight advantage if it is tenanted, is if it is down valued on the rental valuation. If the tenant is paying more than the valuer says it will enable you to challenge the valuation by showing a copy of the AST.
Other than that there shouldn't be a great deal of difference either way.

david porter

11:50 AM, 12th January 2016, About 7 years ago

Why do you think an estate agent would tell you this?
Why would you trust any of this BS?
We have listened to a large number of nonsense from agents.
A house will get a better price during BST rather than GMT.
This is more important than how much furniture is present.

Stephen Smith

13:22 PM, 12th January 2016, About 7 years ago

If a property is subject to a tenancy it is unlikely to be of interest to an owner occupier. Tenanted properties usually are of interest to exsting landlords, particularly if the rent is below market rates and there is scope to increase.
Since there is a shortage of properties on the market a tenanted unit is likely to achieve less in the marketplace

Graham Bowcock

14:10 PM, 12th January 2016, About 7 years ago

Dear Stamples

I am a Registered Valuer and specialise on residential portfolios for high street banks. There is no definitive answer to your question, it will always depend on the actual property. For example I have this morning completed a report on four flats and they are clearly an investment property; they would not split readily (communal hallways, etc.) and it is unlikely there is much demand for owner occupation. They are all let at reasonable rents so the presence of the tenancies adds value.

Contract this property with a family home in a village location and it may be hard to see an investment return where the market is clearly for owner occupation.

I have done a lot of work on portfolios in Manchester and Liverpool where there are now massive student and graduate populations which leads to rental demand and therefore a strong investment market.

From a valuation point of view the property is worth most if the rent is as much as it can be (the Market Rent) and the terms of the tenancy are clear and robust. What detracts is missing paperwork and lack of compliance. Low rents may make properties attractive but do not really add value.


Paul Baker

22:43 PM, 12th January 2016, About 7 years ago

I had an experience where I bought a vacant 3 bed mid-terrace with a BTL mortgage of 85% LTV ( a few years ago!) from a specialist BTL lender (Capital Home Loans).
The Valuer initially returned the value as the same price that I was buying the property at.
One week later, the Valuer then realised it was going to be a BTL & downvalued it by 12% which then meant I couldn't get the lending that was in place for me as the LTV then didn't stack up.
I lodged a formal complaint and eventually won the day and got the property but it just goes to show what an ordeal valuations can be.

david porter

22:47 PM, 12th January 2016, About 7 years ago

Reply to the comment left by "Paul Baker" at "12/01/2016 - 22:43":

I do not have a high opinon of valuers.
They are more frequently wrong as right. Look at the variations between mouseprice and zoopla!
Not to mention discrepanices regarding refurbishment expenses.

Chris Byways

10:48 AM, 13th January 2016, About 7 years ago

Reply to the comment left by "david porter" at "12/01/2016 - 22:47":

David, who do you mean by valuers? Qualified Valuers that are being paid to value, or agents wanting to market, that just might be swayed by the desire to get an instruction?

Do ask several high st agents what they think the difference is, or ask the auctioneers. Some are lucky to get a dozen buyers, others like BJB etc might get a thousand attend. They can assist with the difference between tenanted and vacant, pretty accurately.

But surely horses for courses. A few homes can be either, but many like HMOs are more valuable with robust TAs and a track record of paying on time (and building in good state with fire alarms etc in place), other properties perhaps 3 or 4 bed detached properties with relatively very low returns, would be more valuable with vacant possession.

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