Buying a New Build, Valuation Less than Agreed Price!

Trollfever

Lenders have become increasingly concerned about new-build valuations, and potential mortgage fraud, with the result that some have imposed harsh conditions on new-build purchasers, insisting on deposits of up to 50 per cent or refusing to lend on at all.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/27/cmbuy27.xml

ruggedtoast

Although youre pretty stuffed if they decide to make an example out of you and hold you to the contract, they'd be unlikely to sell the flat for anything like what they'd agreed orignally anyway so there is a fair bit of incentive for them to negotiate with you.If their own brokers now wont give you a mortgage theyd be pretty silly not to.

muggz

CMOI1979 wrote: »

Yes it was Colleys.

Are you buying a new build too?

Something is very suspect when we're talking about a change of 30% in less than 6 month. I personally think they're being ultra conservative given the falls in value their group has predicted over the next year.

Do you what you're going to do? I guess you're probably as worried as I am.

Its not a new build but a newly converted property. Yeah im worried now, just got the report through today. Based on this valuation literally every single property in the area wont be able to get a mortgage via Halifax. Now im faced with the situation of going to another lender and wasting more money.

Premier_2

Trollfever wrote: »

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/27/cmbuy27.xml

That's BTL mortgages which have usually require more equity.

But with naive investors & finance companies alike being conned by the likes of Inside Track in conjunction with developers providing ridiculous valuations of properties off plan, and even more outrageous rental income projections usually in areas totally unknown to the investor, I'm surprised more companies are not refusing to offer mortgages for this type of investment property at present

For those who don't know, Inside Track was a company that would take the typical rental of a riverside appartment in say London which might be £750pw and say they could get the same rental on a brand new riverside complex elsewhere, like S!!!!hhorpe. Not only did they fail to take account of regional variations, but when you suddenly flood the market in one particular area with say 1000 new apartments at the same time all looking for tenants, guess what happens to rent values.

As with all these propositions that promise the earth, the only winners are the company owners themselves. If there was any real chance of making the returns they suggested, do you think they would be giving the advice away for next to nothing rather than investing themselves? Unfortunately there is always some who fall for it though.

neverdespairgirl

CMOI1979 wrote: »

Something is very suspect when we're talking about a change of 30% in less than 6 month.

Yes, but the suspect could simply be the changing credit environment, new build, etc.

Poppy9

Any news OP?

Richard_Webster

If OP and his solicitors knew that this was the show flat and completion would be significantly delayed, there was always a risk that the mortgage offer might run out and not be renewed. Did the solicitors warn OP that there was a risk in exchanging because of this factor? If not, then they may be negligent and OP may have a claim against them.

bubblesmoney

house prices falling faster and further and very little recovery in real terms expected over 20 years

see this link :eek: :eek: may be there is worse valuations to come for these sort of flats and buyer might get stuck with bad debt for a long time to come.

how does one get compensation for bad advice from solicitor? is it via a complaint via solicitors association/ law society / registration body etc or does one do that in a civil case using another solicitor. if the OP is forced to go thru with the purchase at present price looks like he will be up shitscreek in a canoe without a paddle for a long while

Treadmill

I wanted to go and view a property at a Stamford Homes development today but can't because the site is closed as everyone is "At a big meeting"

In my experience and believe me its happened a few times is that a "big meeting" is only ever called to give people thier cards en masse.

I think now might be a good time to play hardball, developers need cash right now... big chunks of it not just the amount to be gained by keeping deposits.

bubblesmoney

no point wasting money on a site that gets closed down because of layoffs and doesnyt get completed for a long time. better to buy houses that a priced at 'present' market value (knowing the risks) and have a house ready to move in and plan on sitting tight for a while to come. if one needs to move because of career etc then better not buy in the 1st place as might be making a big loss if one needs to sell in a year or 2. if its a longer period then who knows.