Natwest Mortgage Undervalue £30k!!

Eric1

cyberion wrote: »

This site has 50+ houses, all of which have sold for the asking price of £205k, some of these have been mortgaged by Natwest.

Apparently, they had bigger deposits than yours.
Banks don't like 90% LTV mortgages any more.

GDB2222

You could just check nethouseprices to see exactly what the other people actually paid. But I agree, it's like a car that loses money the moment you drive it out of the showroom.

RobertoMoir

As its a new build, what you do is you walk away and send the valuer a nice note and a box of chocolates for saving you from making a 30k loss on the property from the get-go.

poppysarah

Use it to your advantage.

Would you like to pay 30k less for the house?

https://www.houseprices.co.uk should give you an idea of prices sold.

PottyHouse_2

Have seen this situation so much on this board - have noticed more as it happened to me last year.

House we were buying was undervalued by £15k - luckily we had a very low LTV (Loan to value) and big deposit (equity) and we managed to secure our mortgage ok but then the chain all fell through anyway !!!! We did question the reliability of the report but the Surveyor would not back down - we did feel the property was probably worth £10k more than they valued it at.

Now we are puchasing property just 6 doors down the street - exactly the same style house but in better location and we have just got our mortgage offer without a glitch on the valuation this time - interestingly the Building Society did their own valuation this time where last time it was Countrywide representative ......

having gone through all that we are still none the wiser ... is it because the location is nicer, the house is in better condition (although that is not supposed to matter) is it that house prices have gone up slightly (but not £15k surely!!!) or is it that no-one knows what the bloody hell is going on in the housing market anymore ??!!!!

Anyway, hope it works out for you .. hopefully you've received some useful advice on here.

MobileSaver

cyberion wrote: »

All was going well, until Natwest did a survey and undervalued the house by £30,000, so they wont give us the mortgage.

bryanb wrote: »

The selling prices are irrelevant, it's the amount of the loan you are questioning.

madeupname1 wrote: »

The purpose of the valuation from NatWest's perspective is to determine how much they could sell the house for in the event that you did not keep up your mortgage payments.

Interesting points, assuming the OP has accurately paraphrased and that the bank has specifically stated the value of the house is £30k less than anticipated rather than they are prepared to lend £30k less than anticipated then that sounds wrong.

It can't be right that a property valuation is different depending on whether the buyer has a 10% deposit or a 30% deposit... can it?

madeupname1

MobileSaver wrote: »

It can't be right that a property valuation is different depending on whether the buyer has a 10% deposit or a 30% deposit... can it?

I agree, but I am not sure that Natwest is saying that the valuation would be different depending on the size of the deposit - I think other posters have speculated that that might be the case.

Milliewilly

_Andy_ wrote: »

Customer: Hello Mr Valuer, here's £300 (say), as you are a professional, could you please tell me how much this house is worth as I'd like to buy it?
Valuer: Certainly, it's worth £175k - by the way, it will probably devalue pretty quickly anyway.
Customer: Ah, rubbish - I'd like to pay tens of thousands more
Valuer: Why did you ask and pay for my opinion then?
Customer: Dunno! C'mon please value it for more?
Valuer: So you want to pay tens of thousands more than what it's worth?
Customer: Yes please!!

I'm guessing the OP takes a £1 loaf of bread up to the till to Tesco and refuses to pay anything less than £2.

But the point it these are the same valuers that were overvaluing for the same banks in the early 2000's to 2007. They are now undervaluing for the same banks. The surveyor's opinion on the property is not impartial as to market rate, it depends on what instructions the lender has given to them and I can see that buyers find this unfair as they are buying at market rate not reposession rate.

They are also valuing on a worst case scenario of the buyer defaulting. If they think the buyer will default why are they taking the arrangement and valuation fee from them?

GDB2222

Milliewilly wrote: »

But the point it these are the same valuers that were overvaluing for the same banks in the early 2000's to 2007. They are now undervaluing for the same banks. The surveyor's opinion on the property is not impartial as to market rate, it depends on what instructions the lender has given to them and I can see that buyers find this unfair as they are buying at market rate not reposession rate.

They are also valuing on a worst case scenario of the buyer defaulting. If they think the buyer will default why are they taking the arrangement and valuation fee from them?

I absolutely agree with all that. Nevertheless, newbuilds lose value the day people move in. Effectively, the banks are lending 90% on secondhand properties but only 80% for newbuilds. I think they are right, but it's a shame they are not more explicit about it, so as to avoid disappointment.

The problem would go away if people stopped paying a premium price for newbuilds, but at the moment the only way they can do that is by buying a secondhand property.

Eric1

MobileSaver wrote: »

It can't be right that a property valuation is different depending on whether the buyer has a 10% deposit or a 30% deposit... can it?

Why not?
If someone has a big enough deposit, the lender has enough security, and is happy to accept whatever price the buyer is happy to pay.
A house is worth what someone, however dumb, is prepared to pay for it.