How we value security for Borrowers?
All loans at FOLK2FOLK are secured against UK land or property; it’s what underpins every loan we make.
When you apply for a loan, we’ll need to assess the value of the land or property you’re offering as security. Here’s how we do it, and what it means for you.
Independent, professional valuations
We work with a national panel of independent, RICS-accredited valuers to assess the property or land offered as security. This means the valuation isn’t carried out by FOLK2FOLK, but by trusted, professional firms with local expertise. The type of valuation depends on the loan size:
- For loans up to £750,000, we typically carry out a desktop valuation.
- For loans above £750,000 (or if we consider it necessary), we require a Red Book valuation and a formal, in-person inspection conducted by a RICS-registered surveyor.
These valuations reflect the open market value: what a willing buyer might reasonably pay for the property in current market conditions.
A sensible, conservative approach
We take a realistic, not speculative, view of property value:
- We focus on what the security could achieve if it had to be sold.
- We assess factors such as property type, location, access, restrictions, and planning status.
- If the property is unusual, remote, or has limited resale appeal, we may reduce the amount we’re willing to lend.
Maximum Loan-to-Value (LTV)
We typically lend up to a maximum of 60% LTV meaning the loan will not exceed 60% of the property’s assessed market value.
This protects both you and our investors by ensuring there’s a buffer if the property needs to be sold.
For example:
If your security is valued at £1,000,000, the loan we offer is likely to be no more than £600,000.
More Than Just the Valuation
While the valuation is an important part of the process, it’s not the only factor we consider. We also look at:
- You
- Your business purpose and future plans
- The viability of your repayment or exit strategy
- The strength and marketability of the security offered
In Short
Our aim is to make fair, fast lending decisions backed by professional property valuations and a sensible view of the risks involved. We’re not here to undervalue your assets or make the process difficult. But we do need to be confident the loan is properly secured, for all parties involved.
