New Build Bank Valuation .v. Developers stand off

Mr_Maz

Hi all,

I agreed to buy a home for £184,995, but when the Nationwide valued it the they came back with £175k as I was getting £10k incentive towards deposit and stamp duty (on top of 15% equity share). The house is an ex-showroom house, fully furnished and has been available for some time.

I agreed the initial deal with the developers (Persimmon) as I wanted a 75% mortgage at 4.33% to make the finances work now I would have to take an 80% at 5.88% which would be an extra £150 a month - which is a straight no no.

the developers initial response is that they will not reduce the price to £175k which in real terms is a loss of £5700 as the cost of their incentives would reduce by £4300.

I've said that I am only interested in the 75% mortgage and that I have invested the rest of my surplus cash and only have £10k left for initial deposit payments.

I have paid a £1000 non-refundable reservation fee along with valuation and searches etc, but would rather lose that than pay an extra £150 a month for 3 years.

Any advise etc would be appreciated.

thank you

lynzpower

Persimmon want you to pay more.

I suggest you tell them you cant afford it and walk away. Leave them to consider whom else they are going to sell it to.

Bare in mind every other person is going to have a surveyor round and that surveyor is going to say the same thing, persimmin totally know that gifted deposits is no longer acceptable to lenders.

Be brave, call thier bluff.

have a search on here, there are lots of people experiencing similar x

Mr_Maz

thanks Lynz.

If I get them to admit that they knew the lender would not include the gifted deposit could I claim that they mis-leaded me when I paid the reservation fee? as it was made very clear that the deal was structured for a 75% LTV?

thanks again?

michael1983l

I went to see a Permission homes plot and they were quoting me silly prices for new builds. For example 235,000, whilst the average price of a used property in the area of similar size is only 160,000. They are just cashing in on those that are forced to take these schemes. If it was me I would just walk away, if you did would you lose any cash?

Mr_Maz

michael1983l wrote: »

I went to see a Permission homes plot and they were quoting me silly prices for new builds. For example 235,000, whilst the average price of a used property in the area of similar size is only 160,000. They are just cashing in on those that are forced to take these schemes. If it was me I would just walk away, if you did would you lose any cash?

I would lose the £1k reservation cost, plus valuation and searches. nothing in the big scale of things

michael1983l

Mr_Maz wrote: »

I would lose the £1k reservation cost, plus valuation and searches. nothing in the big scale of things

They have mis-sold the product to you though. So you should be entitled to a full refund.

Mr_Maz

if they don't reduce their asking my price, and I walk away. My solicitor will be making contact... thank fully I also paid by credit card which will provide additional cover.

michael1983l

Mr_Maz wrote: »

if they don't reduce their asking my price, and I walk away. My solicitor will be making contact... thank fully I also paid by credit card which will provide additional cover.

Good, I hate it when these institutions rob people of their hard earned cash through legal loopholes.

lynzpower

I really think that they will. I mean they might make you sweat a bit, but I expect that they will take you offer.

Do I deduce as its the show home that the others on the development have sold? Beingone of the last unit to sell, usually offers a great deal of leverage.

Mr_Maz

lynzpower wrote: »

I really think that they will. I mean they might make you sweat a bit, but I expect that they will take you offer.

Do I deduce as its the show home that the others on the development have sold? Beingone of the last unit to sell, usually offers a great deal of leverage.

it is the only house finished on the site, and they have said they are not building the rest of the plots until they are reserved.

the site sales lady keeps saying that they will not go below 185k (list was 230k but I now know the house next door went for £190k in December, but without stamp duty and furniture) as the lender has valued it at 175k due to the 10k incentives so the property is still worth 185k, I've said I will only pay the building valuation of 175k plus the incentives so I can get a 75% LTV as an 80% LTV is 1.5% more.

Robert_Sterling_3

Mr_Maz wrote: »

thanks Lynz.
If I get them to admit that they knew the lender would not include the gifted deposit could I claim that they mis-leaded me when I paid the reservation fee? as it was made very clear that the deal was structured for a 75% LTV?
thanks again?

I think you have a "prima facie" case for such a claim.
They obviously must overprice the flats in the first instance in order to be able to offer the incentives.
were anyone to take them to the small claims court, to get their deposit back it would not be good PR for them and they might be inclined to pay up "as a gesture of goodwill "