A PROPERTY owner has been given a valuation of £1 for a two-bedroomed terraced house – after he spent spent £10,000 refurbishing it.

Paul Rooney, who owns 33 properties with his partner, Keith Widdrington, bought the house in Holmside, near Sacriston, County Durham, for £86,000 in early 2007 – before the credit crunch.

Property experts said the £1 valuation, on behalf of the Nationwide Building Society, was a sign of lenders’ nervousness about the market.

Mr Rooney applied for a mortgage for the house in June, having obtained a valuation of £120,000 before the refurbishment work.

He said he reapplied for the mortgage in September, after a neighbouring property had sold for £141,000, with a tenant paying rent of £550 a month.

But a report by a valuer for Nationwide said it was inhabitable and that the property suffered from damp.

Mr Rooney said: “We are being hammered against the wall because the banks simply do not want to lend to us.”

A Nationwide spokesman said: “Valuers are instructed to use a £1 valuation if the property is outside our criteria or if further reports or investigation is required.

“The property was valued on a buy-to-let basis and, as it was not habitable, we could not proceed."