We recently carried out a building inspection which came up fine but after following up our client we found out she didn’t get the property. Her finance was not approved because of environmental factors. The property she wanted was too close to a mobile tower/power lines.
I contacted our friend Tim Cunningham of Cunningham Valuers and Property Advisers to get his expert view on this exact situation.
He told us that yes, this is in fact a thing that banks are looking at these days. If your finance was not approved, there are a few factors in the mix you may not have been aware of! There is a section in the valuation reports called the Risk Ratings which looks at other factors outside of the valuation figure. There are 8 in total. Amongst those are things like Market Volatility, Local Economy Impact, Location/Neighbourhood, Environmental Issues and Improvements. Each of those are rated 1 – 5, with 1 being low risk and 5 being high risk.
Factors such as flood affected areas, power lines, proximity to an airport/main road, asbestos, or no building approvals can all affect the valuation of your current home or the property you’re looking at purchasing.
The banks are just as interested in the risk ratings as the actual value of the property. From a building inspection point of view, these points make sense. Rectifying subsidence to a property and asbestos removal are both very expensive things to carry out.
While we’re used to looking at these factors when building a house, they haven’t historically come into play when buying an already established property. It goes to show that times have indeed changed.