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The crucial role of an experienced valuation panel manager 

by | Aug 14, 2023

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Jack Over, Operations Director, Gateway Surveyors 

In the ever-evolving UK housing market, Houses of Multiple Occupation (HMOs) and Multi Unit Freehold Blocks (MUFBs) have become an increasingly popular area for investors, offering the potential for higher rental yields and increased cashflow.  However, accurately valuing such properties can be a challenging task due to their unique characteristics – such as the layout, size of rooms, and restrictive criteria – and income generation potential.  

This is where an experienced Valuation Panel Manager can play a pivotal role, ensuring that mortgage lenders make informed decisions based on a valuation report provided by a surveyor who has the expertise to complete these specialist valuations.  It is essential that surveyors acting in this specialist market have a good understanding of all relevant factors that could influence both capital and rental value, ensuring the lender avoids potential pitfalls, particularly incorrect property valuations. 


Valuing HMOs and MUFBs require a keen understanding of various factors that contribute to their market worth. Unlike traditional single-family homes, these properties rely on rental income, and their valuation goes beyond simply assessing comparable sales in the surrounding region. An experienced Valuation Panel Manager brings a specialised skill set to the table, considering essential aspects such as: 

  1. Rental income analysis: Accurately assessing the potential rental income of an HMO or MUFB is crucial in determining its value. A surveyor will perform in-depth rental market analysis and factor in occupancy rates, prevailing rental rates, and tenant demand to arrive at a realistic income projection. 
  1. Knowledge of local regulations: HMOs and multi-unit properties are often subject to specific Local Authority licensing requirements, such as understanding if the property is located within an Article 4 area and what planning permissions are required when converting single homes or residential properties in to HMOs.  A seasoned surveyor will be well-versed in these requirements and ensure that the property’s valuation complies with all relevant licensing requirements and the RICS Professional Standard. 
  1. Understanding property configuration: The layout and configuration of an HMO can significantly impact its use and value, and it’s vital its layout is thoroughly assessed; both in its current configuration and in terms of whether any rooms can be re-purposed in order to provide additional bedrooms.    

MUFBs will need an assessment to ensure that services are separately metered and that all units would be individually marketable/mortgageable. 

  1. Market trend analysis: The UK housing market is subject to constant fluctuations, and HMOs and MUFBs may respond differently to market trends than single-family homes. It’s important that a surveyor stays up to date with market dynamics, and considers each case individually when inspecting the property. 

Case Study: The potential pitfalls of an incorrect specialist valuation  


Let’s consider a hypothetical case to illustrate what could go wrong if a valuation isn’t correctly undertaken.  

A mortgage lender receives an application for a loan on a MUFB in an up-and-coming urban area. The lender engages a valuation panel manager who does not have surveyors with the relevant experience in assessing such properties and relies solely on comparable sales of nearby single-family homes. 

The inexperienced inspecting surveyor fails to account for crucial aspects such as the property’s rental income potential and the demand for MUFBs in the area. Consequently, they overvalue the property, leading the lender to approve a mortgage that does not accurately reflect the property’s actual market worth. 


As time passes, the lender realises that the property’s rental income does not achieve the projected amount advised in the valuation report. The overestimated value not only exposes the lender to a higher loan-to-value ratio but also affects the property’s overall loan. In worst-case scenarios, this miscalculation could lead to potential defaults and financial losses for the lender. 

In the dynamic world of property investment, valuing HMOs and MUFBs accurately is critical for mortgage lenders to mitigate risk and make informed decisions. Working in collaboration with an experienced Valuation Panel Manager who employees are fully trained in these specialist valuations, brings a wealth of specialised knowledge to the process. 

By avoiding potential pitfalls associated with incorrect valuations, mortgage lenders can confidently offer loans that reflect the true market value of HMOs and MUFBs, enabling them and their clients to thrive in the lucrative rental property market while safeguarding their financial interests.” 


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