A recent case spells bad news for buy-to-let purchasers who rely on valuations prepared for lenders.

Buy-to-let

A recent Court of Appeal case, Scullion v Bank of Scotland (2011) was bad news for those purchasing property to let.

In it, the buyer had relied on the valuation provided to the lender, which stated that the property was of a particular value and would have a rental income of £2,000 per month.

In fact, it turned out that this valuation was incorrect and it was not possible to obtain a rent sufficient to meet the mortgage on the property. The rental income he was able to obtain was only £1,050 per month.

The purchaser tried to sue the valuer for professional negligence. In the lower courts the decision went his way, but the Court of Appeal recently overturned the decision, saying someone who purchases a property for the purposes of letting isn't entitled to rely on a valuation prepared for their lender. They should instead obtain their own valuation report if they wish to rely on it.

Buying your own home

This is very different to the position for people buying their own homes where they're entitled to rely on the valuation prepared for their lender.

The reason for the difference is that someone buying for the purposes of letting is doing so as a commercial transaction and the purchaser is expected to obtain an independent valuation or survey to support their commercial decision.

What next?

This case throws more light on the difficulties in making professional negligence claims. Access Legal from Shoosmiths has specialist professional negligence solicitors who can advise you from the outset on what type of claim you could make, and the sort of remedy you could obtain.

For a free, initial consultation, please call our helpline on 03700 86 86 86 or contact us online.

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