Mortgage Retention Amount - How do they set the amount

jellynose · 14 November 2014 at 12:38PM

Hi Everyone

I am remortgaging my house was looking to borrow £80,000.

Virgin did a survey and said that they were holding £2,000 back until a further damp/cavity wall tie inspection and work is done.

I have arranged for an independent damp/wall tie person to come out so that is all fine.

My question is how do they decide on the amount to hold back. Is £2,000 a percentage of a figure or is it an indication of how much they think the problem would be to repair?

I am interested to know where they pluck/make up/calculate the retention figure form.

kingstreet · 14 November 2014 at 12:42PM

Surveyor values property and thinks there might be a problem.

Suggested retention is surveyor's "finger in the wind" estimate of cost to repair.

Get an independent damp surveyor out to inspect and avoid "free" reports from installers of DPCs and when the cost of repair is £100 for new guttering; or digging out some soil which is bridging the damp course, the retention will be reduced or lifted once the surveyor sees what his moisture meter failed to indicate - that moisture often doesn't indicate damp.

http://independentdampsurveyors.co.uk/

jellynose · 14 November 2014 at 2:17PM

Thanks Kingstreet, I have asked a truly independent person to provide a report on the issues. Another £325 bites the dust

Thrugelmir · 14 November 2014 at 2:43PM

Retentions are often set at a level where it's in the purchasers interests to get the work done. As the actual cost is far lower than the amount of mortgage withheld. Stick and carrot.

lillymck_2 · 20 December 2014 at 1:16PM

hi there new to the site

lots of information on here and i have a query.

made an over on house thought we getting a bargain at 99000 survey just came through yesterday and states retention on mortgage until work to rectify damp has been carried out, it stated property worth 96000 in current state as first time buyers i don't just have 3000 lying around so my question is 1) if we can get the seller down to 96000 would the surveyor lift the retention or 2) if work carried out before purchase will they given us the 99000, unfortunately the report wasn't very clear on this so have been trying to contact the surveyors to get more in dept information on this.
has anyone else gone through this process tha could advise of their personal experience?????

kingstreet · 20 December 2014 at 2:13PM

If the specialist report indicates no work is necessary, the retention will be lifted and the £99,000 valuation will stand.

If work is needed, ask the vendor to get it done and you can then pay the £99,000 as the increased valuation will stand after that

or

If work is needed, you get the specialist report. The retention will then be the amount detailed in the report. You make a reduced offer of £96,000.

The retention will still apply, so you'll have to increase your deposit by that amount to enable the purchase to proceed. You then get the work done after completion and request the retained funds after a reinspection is carried out, or you provide acceptable invoice(s) to the lender.

After that, you have a property worth £99k you paid £96k for.

lillymck_2 · 20 December 2014 at 3:10PM

thanks for the advise really helpful, spoke with the surveyors office and feel much more confident now. just have to brush up on my negotitation skills

and hope fore a positive outcome!!!!

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Mortgage Retention Amount - How do they set the amount

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