Surveyors Risk Court Action

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By:
Madalena Penny

In an unprecedented case last week, one landlord was awarded £72,000 in damages when a surveyor overestimated the value of rental property, landlord Emmet Scullion had invested in.

Costing Mr. Scullion £352,950 in 2002 and given a rental value of £2,000 per month by surveying company, Colleys, the property in Surrey only fetched a top rental of £1,000 per month.  Selling his property in 2006, the courts awarded the landlord based on loss of rental income and transaction costs connected with the sale and purchase of the property.

Concerns by surveyors and their insurance companies founded on Mr. Scullion’s successful claim could now lead the way for similar landlords to take action on over-estimated rental returns that have fallen from the mark provided from the survey.

David Dalby, head of the residential faculty department for the Royal Institute of Chartered Surveyors said:

“Although the market has changed drastically in recent years the same fundamentals apply when determining a capital value of rental property.  These are the condition of the property, it’s location, nearby facilities and so on.”

While tenant demand is at its peak, there’s little problem for landlords at present reaching rental values set by surveyors, although concerns about the stability of the private sector, including rising rents, housing benefit caps, job losses and a fear of rising interest rates have caused a lack of confidence in the sector generally, buy-to-let is still hot property.

At a time when rents are at an all time high and property can be bought at below market value prices, the present economic climate is a perfect time to invest in buy-to-let property for professional and novice landlords, especially with rising rental yields.

Legal 4 Landlords operation manager, Steve Moss said:

“ At present the UK PRS is worth £500bn, with a rise in social sector rents, it’s possible more tenants will now turn to the private rented sector increasing the industry’s net worth, the result of which makes investment in buy-to-let properties one of the best returns on investment possible in today’s economic climate.”