MRT1 LO10: Factors affecting property value

A property's value decides how much a lender will lend, how easy the property will be to sell, and whether it is acceptable security at all. LO10 is one of the largest outcomes in the CeMAP® MRT1 unit. It looks at value from the customer's point of view and the lender's, and at the legal, insurance and environmental issues that can raise or lower value.

1. Implications for customers (AC10.1)

Factor	Effect on value and on the customer
Type of property	Houses usually have the widest market. Flats raise lease, service charge and building safety questions. Flats above shops, studio flats and some high-rise blocks are restricted by many lenders, which narrows the pool of buyers.
Location	Transport, schools, jobs, amenities and the character of the area drive demand. Negative features include flood zones, nearby industry and planned infrastructure.
Building materials	Traditional brick or stone with a tiled or slated roof is the standard. Non-standard construction, timber frame and thatched roofs can limit lenders and raise insurance costs.
Restrictions	Covenants, planning conditions (for example an agricultural occupancy condition), listing and conservation area controls can limit use and alterations.
Age	Older homes may have period appeal but higher maintenance and the risk of hidden defects. New-build homes can sell at a premium that may not hold on resale.
Condition	Disrepair reduces value and may lead to a retention or down-valuation.

A customer who overpays, or buys a property with a narrow market, faces a higher risk of negative equity and may struggle to remortgage.