Implications of the Current Trend in Mortgage Valuation Practice in Nigeria

Aluko, Bioye Tajudeen

doi:10.3846/1648715x.2007.9637558

Cited by 14 publications

(25 citation statements)

References 8 publications

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“…Also Aluko (2007) carried out further study of the mortgage valuation process in Lagos metropolis. In the study, the author administered questionnaires randomly on Estate Surveying and Valuation firms practising within the study area as well as the lending institutions with the intention of ascertaining whether the contents of mortgage valuation reports and estimates being given by the valuers meet the expectations of the lending institutions as well as meeting the standards set for such valuation by the profession.…”

Section: The Study Areamentioning

confidence: 99%

Empirical Verification of the Accuracy of Valuation Estimates Emanating From Nigerian Valuers: A Case Study of Lagos Metropolis

Ayedun¹,

Ogunba²,

Oloyede³

2011

IJMS

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There have been increasing criticisms of the ability of Nigerian valuers to undertake investment valuations in a reliable and accurate manner. This study sought to examine with a view to validating or dispensing the criticisms as to whether Nigerian valuers are capable of undertaking investment valuations in a reliable and accurate manner or not. To achieve this aim, the paper employed quasi-experimental survey methods. Forty five (45) estate surveying and valuation firms were sampled in Lagos Metropolis, the study area. The study used both descriptive and inferential statistics. The study revealed a wide variance of valuation estimates from the sale prices of the twelve properties sampled which indicated that the valuation estimates are not accurate and reliable. The study concluded that the Nigerian Institution of Estate Surveyors and Valuers and Estate Surveyors and Valuation Registration Board of Nigeria (the two bodies responsible for the regulation of the valuation profession in the country) should take up the responsibility of ensuring that variance in valuation is minimised by way of providing databank in order to provide more meaningful valuation advice.

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Section: The Study Areamentioning

confidence: 99%

Empirical Verification of the Accuracy of Valuation Estimates Emanating From Nigerian Valuers: A Case Study of Lagos Metropolis

Ayedun¹,

Ogunba²,

Oloyede³

2011

IJMS

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“…Oyetunji and Oyetunji-Olakunmi (2017) assessed viability appraisal practice in Lagos and concluded that the application of appropriate modern appraisal techniques is a difficult task for estate surveyors and valuers in the area. Aluko (2007) found that most estate surveying and valuation firms in Lagos were not reflecting appropriate basis, methods and information contents in their mortgage valuation reports. This form of practice will certainly result in inconsistent and inaccurate valuations.…”

Section: Methods Of Valuationmentioning

confidence: 99%

“…There are several issues involved in secured lending valuations. Principal among these have been identified by a plethora of studies (Crosby, 2000;Aluko, 2007) to include the use of wrong valuation bases, data and methods, resulting in inaccurate property valuations. The nature of these issues in the context of secured lending valuations are discussed as follows:…”

Section: Issues In Secured Lending Valuationsmentioning

confidence: 99%

Valuation of Urban Commercial Properties in Nigeria for Secured Lending: Issues and Developments

Udoekanem

2018

Int J. of BES

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Valuation for secured lending is required when an interest in real property is used as security for a loan. The outcome of such valuation will help the lending institution to achieve commercial prudence in lending as well as avoid taking undue risk. This paper examines the issues and developments in the valuation of urban commercial properties in Nigeria for secured lending purposes. It argues that due to the volatile nature of the Nigerian economy, coupled with the linkage between the economy and commercial property markets, the maximum amount of loan to be granted by lenders in the country using interest in commercial property as collateral should be based on the Mortgage Lending Value (MLV) and not the Market Value (MV) of the property, although the market value should also be reported in the valuation. A case study is used to demonstrate the valuation. It further contends that since the inputs for determining the MLV of a commercial property must be derived from long-term trends in the property and financial markets, it is more stable than MV when used to determine the maximum amount of mortgage loan to be granted by a lender. It concludes that the stability of the MLV makes it more reliable than the MV in achieving commercial prudence in mortgage lending as it fits into the long-term nature of mortgage loan repayment.

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“…Some DMBs however require rental value (RV) in addition to MV and FSV (Babatunde, 2011;2017). Aluko (2004Aluko ( , 2007, Ogunba (2004), Oluwunmi et al (2011Oluwunmi et al ( , 2013, Ishaya et al (2012) and Adegoke et al (2013) were some of the studies that investigated the needs and satisfaction of DMBs in SLV reports in Nigeria. They held divergent views on the appropriateness of the reports.…”

Section: Literature Reviewmentioning

confidence: 99%

Utilization of valuations for secured lending in Abuja, the federal capital city of Nigeria

Olajide¹,

Ayodele²

2019

J. Land Manag. Appraisal

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Utilization of secured lending valuations (SLV) by deposit money banks (DMBs) has not been sufficiently investigated in Abuja, Nigeria. Adequacy of the reports, factors influencing their use and how DMBs utilized them for loans were examined. Primary data collected from Estate Valuation (ESV) firms and DMBs were analyzed. Although the study showed that substantial portions of the report were adequate, crucial aspects such as valuation methods and value-opinions were not satisfactorily prepared. It also indicated that the poor perception of DMBs on valuation reports was the most critical factor that influenced their use. Value opinion, considered inadequate, was however sufficiently utilized. This inconsistency could lead to mortgage valuation failure in the city. The study recommends that valuation regulators should mandate ESVs to acquire periodic contemporary skills before their licenses are renewed. Lending regulators should similarly ensure that SLVs are processed by retained ESVs before utilization.

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Implications of the Current Trend in Mortgage Valuation Practice in Nigeria

Cited by 14 publications

References 8 publications

Empirical Verification of the Accuracy of Valuation Estimates Emanating From Nigerian Valuers: A Case Study of Lagos Metropolis

Empirical Verification of the Accuracy of Valuation Estimates Emanating From Nigerian Valuers: A Case Study of Lagos Metropolis

Valuation of Urban Commercial Properties in Nigeria for Secured Lending: Issues and Developments

Utilization of valuations for secured lending in Abuja, the federal capital city of Nigeria

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