Monday, April 28, 2008

Bank raises some mortgage valuations

HSBC has an on line property valuation tool which enables users to check the mortgage value of a property. The on-line valuation tool has some limitations in that it is not an accurate reflection of market values (it tends to lag the market) and it does not cover all properties (mostly the larger estates and selected individual buildings). However, it is an objective basis for calculating net worth (I use it for our consoldiated balance sheet) and provides a very rough indication of value when looking to buy or sell a property.

Back in January HSBC increased the mortgage values of all our properties. I check the values from time to time, and yesterday I found that HSBC's on-line values for two of our properties have been increased again. This is obviously good news and indicates an increase in our net worth. It is also an indication of what is happening in the market place as investors search for both yield and protection against inflation while home buyers seek to take advantage of improved affordability (low interest rates and rising incomes). In effect, demand is driving prices higher.

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