The Intermediary – July 2026 - Flipbook - Page 35
RESIDENTIAL
Opinion
Below market
value cases deserve
more attention
I
n a property market where
every percentage point
maers, buying well has
become just as important as
borrowing well. Investors
are looking beyond simply
securing finance and placing greater
emphasis on finding opportunities
that strengthen the numbers from the
very start.
That is one reason why below
market value (BMV) purchases are
receiving more aention.
Below market value should not be
treated as a loose sales term, as a low
purchase price does not always mean
an asset is worth more. Sometimes the
discount is there because the property
has defects, legal issues, poor demand,
weak rental prospects or a cost base
that has not been fully tested.
A strong BMV case starts well
before the finance application lands
with a lender. It starts with how
the opportunity has been sourced,
how the value has been checked and
how the borrower plans to make
the transaction work. Comparable
evidence and local market knowledge
maers, especially the valuers, and
it’s also important to understand the
reason why the vendor is willing to
sell at that level.
There are many sound reasons why
a vendor may accept a lower price, as
they may need access to funds quickly
or they may be selling an asset that
does not fit their plans. It may be a
probate sale, an auction purchase, a
landlord exit or a property where a
lender has taken possession and wants
to quickly recover their capital.
An investor who buys well, and
gets the funds for the deal sensibly,
execute their strategy and either exit
cleanly, then move on to the next asset
or refinance onto a term loan based on
the full market value. Therefore, they
are likely to need advice again and
again. The broker who understands
that paern can support the client at
each stage. That may be on a purchase
bridge, the exit loan, the refinance or
the next acquisition.
This is why BMV cases can be such
a strong source of repeat business for
both brokers and lenders.
It is not just about one transaction,
it’s about helping a client make
the best use of their capital over a
series of deals.
For lenders, it’s all about making
sure they get the balance right. Those
that take too rigid a view based only
on the purchase price may miss the
strength of the underlying asset.
Equally, a lender that accepts every
BMV claim at face value is taking on
avoidable risk.
Adding value
The question should be simple: what is
the property worth, and can that value
be proven?
If the answer is supported by sound
valuation evidence, the lender can
look at the case in a more rounded
way. That does not mean ignoring
risk. it just means looking at the
asset, the borrower, the exit, and the
evidence behind the value.
In some cases, lending against
supported market value rather
than purchase price can help the
borrower make beer use of their
capital. It can also help them move
quickly when timing is vital. For an
experienced investor, that speed can be
the difference between winning and
losing a deal.
Pricing also has a significant part to
play, as on BMV transactions, the total
cost of funds must still make sense
against the wider plan. Arrangement
fees, broker fees and margin all feed
into the economics of the deal, and a
RAHUL SHARMA
is business development
manager (South) at District &
County Investments
structure that works for one purchase
may not work for another. That is
why lenders need enough flexibility
to shape terms around the case, while
still keeping a clear view of risk.
The best brokers in this space
provide the story behind the
transaction. They explain why the
asset is being sold below value and
they support the figure with evidence.
They set out the borrower’s plan and
exit route and also understand where
the risks sit.
That level of detail gives lenders
more confidence and it also gives
borrowers a beer chance of securing
the right facility.
We are seeing more brokers return
with this type of business because they
want lenders that can understand the
gap between price and value. But the
wider point is not about any single
lender, it’s about where the specialist
bridging finance market is heading.
Below market value opportunities
will remain aractive, but they will
only support strong repeat business
where the deal is real, the evidence
is clear and the funding structure
fits the plan.
The market does not need more
woolly claims of hidden value, it needs
more well-supported transactions
where broker, lender and borrower all
understand the deal in full.
That is where BMV lending can
add real value. Not as a one-off tactic,
but as part of a long-term funding
strategy built on proof, discipline and
repeat performance. ●
July 2026 | The Intermediary
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