Death of the BMV industry

Many landlords will have heard of the so called BMV property. The concept has spawned a whole industry which promise to deliver to landlords bargain properties that they can ten remortgage at the full market value. A landlord was then able to take out any of their equity tied up in the property they have just bought.

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During the heady days of buy-to-let lending some landlords were able to grow their portfolio rapidly and at little cost to themsleves.

The reality is that the BMV industry is dead, dead, dead!

The whole business was based on landlords exploiting a loophole that enabled them to get the mortgage surveyor to agree a valuation on the property substantially above that they had paid for the property. During the boom there were a number of buy-to-let mortgage companies that would do same day back to back remortgages. A landlord could therefore complete a purchase at say £100k. On the same day they would have a mortgage lined up with a mortgage valuation of say £125k. Using a 80% mortgage this would allow a landlord to leave no equity in the property which they would then recycle to buy another BMV property.

This route is no longer open to landlords because mortgage company surveyors are sticking strictly to the RICS code of valuation which requires them to use the agreed sale price as the value of the property however cheap that might appear.

This means the whole BMV industry is dead. The price of a property is it's market value. Don't let any property wide boy or speculators tell you otherwise.


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