Remortgage Survey Valuation 40% below expected house value

Martinh

Hi
New selfbuild (2009) detached 2.5 storey house (501sqm), was valued (in writing) by local estate agent at between £825k-£900k. Went to Halifax for a remortgage (Free survey and legal), valuer came back with a value of £500k.

This values the house at £998 P/sqm.

A semi-townhouse 2.5 storey house (145sqm) across the road sold in May 2010 for £250k

This values the house at £1724 P/sqm.

The average for the town on sales in the past year is £1650 p/sqm.

I went back to the valuer and he is sticking to his guns, and it now appears the the Halifax are going to stand by his valuation.

I have offered to pay for another survey by another valuer from the Halifax's panel to offer some balance and clarity (I'm still awaiting their answer on this).

Other than go to my lawyer to raise an action against the valuer, I am perplexed and would appreciate any advice.

sonastin

Its quite unusual in the UK to base valuations on price /sq.m - lots of other factors come into play as well as floor plan. There might be a lot of people looking for the smaller houses so they attract a premium but fewer buyers for a place your size so you would have to reduce the relative price accordingly.

As its a self-build I guess there is nothing quite like it around the area but I suggest you put a buyer's hat on and think about which other properties buyers might consider alongside this one and then have a look at what they are actually selling for in the town. That will help you to come up with your own realistic valuation to compare with the EA and surveyors figures.

Cannon_Fodder

What did the self-build, including land, cost to complete ?

Martinh

I had a look at the local town over the last year (houses sold), houses currently for sale and large houses in the west of Scotland.

This is what I found.

Houses Sold in Last Year Carluke

35 West Avenue Carluke ML8 Detached 6public 4bed 3bath 385sqm £435,000 £1,129 Offers Over £500,000 115% Apr

‐10 Slater Hogg £1,298

48 Station Road Carluke ML8 Semi

‐Detached 2Public 3bed 1bath 108sqm £200,000 £1,852 Fixed Price £190,000 95% Nov‐09 ie Estates £1,759

119 Carnwath Road Carluke ML8 Semi

‐Detached Bungalow 1public 3bed 1bath 92sqm 124000 £1,348 Offers Over £126,500 102% Nov‐09 ie Estates £1,375

5 Middlehouse Court Carluke ML8 Semi

‐Detached Bungalow 1public 2bed 1bath 47sqm 88000 £1,872 Offers Around £85,000 97% Sep‐09 ie Estates £1,809

18 Cairnhill Court Carluke ML8 Mid Terr Villa 1public 2bed 1bath 41sqm 90000 £2,206 Offers Around £80,000

89% Aug‐09 ie Estates £1,961

9 Malplaquet Court Carluke ML8 Mid Terr Villa 1public 2bed 1bath 52sqm 79995 £1,543 Offers Over £83,000 104% Apr

‐09 ie Estates £1,601

79 Clyde St Carluke ML8 End Terr Bugalow 1public 1bed 1bath 58sqm £75,000 £1,290 Fixed Price £75,000 100% Mar

‐10 ie Estates £1,290

20 Station Road Carluke ML8 Townhouse 3public 4bed 3bath 145sqm £249,995 £1,724 Offers Over £250,000 101%May 10 Slater Hogg £1724
Houses For Sale Carluke
41 Lanark Rd Carluke ML8 Detached 4public 5bed 2bath 168sqm £369,000 £2,202 Offers Over Remax
4 Victoria Ave Carluke ML8 Semi

‐Detached 2public 4bed 2bath 138sqm £185,000 £1,338 Fixed Price Morison & Smith

78 Goremire Road Carluke ML8 Detached 2public 5bed 2bath 135sqm £220,000 £1,631 Offers Over Slater Hogg
25 Mill Rd Carluke ML8 Detached 3public 4bed 2bath 124sqm £230,000 £1,856 Fixed Price Remax
74 Sandy Road Carluke ML8 Detatched 2public 4bed 3bath 112sqm £220,000 £1,964 Fixed Price ie Estates
West Avenue Carluke ML8 Detached 2public 3bed 1bath 108sqm £209,995 £1,944 Offers Over Countrywide
Old Brigend Carluke ML8 Detached 3public 4bed 2bath 98 £170,000 £1,733 Offers Over Slater Hogg
17 Whiteshaw Ave Carluke ML8 Semi

‐Detached 1public 2bed 1bath 75sqm £105,000 £1,400 Fixed Price ie Estates

Hallcraig Place Carluke ML8 Detached 2public 3bed 1bath 74sqm £129,000 £1,746 Offers Over Slater Hogg
Station Rd Carluke ML8

Flat 1public 2bed 1bath 60 £95,000 £1,573 Offers Around Rightmove

Larger Houses for Sale West of Scotland
15 Juniper Ave Bridge of Weir PA11 Detached 3 5 4 489sqm £1,000,000 £2,045 Offers Over Savills
Lanark Rd Garrion Bridge ML9 Detached 5 5 6 406 £1,300,000sqm £3,202 Select Avail Savills
Lanark Rd Garrion Bridge ML9 Detached 5 4 5 398sqm £865,000 £2,173 Select Avail Savills
11 Silverwells Cres Bothwell G71 Detached 4 6 5 382sqm £1,200,000 £3,141 Region of Savills
5 Old Mill Lane Uddingston G71 Detached 3 5 5 380sqm £650,000 £1,711 Offers Over Savills
Kilwinning Rd Irvine KA12 Detached 3 5 4 356sqm £495,000 £1,390 Offers Over Savills
Candybank Farm Biggar ML12 Detached 3 4 2 251sqm £400,000 £1,594 Fixed Price Savills
The Dee Carlisle Rd Ferniegair ML3 Detached 3 4 4 182sqm £340,000 £1,864 From Taylor Wimpey

Blackwood Estate Lanark ML11 Detached 3 4 2 180sqm £325,000 £1,806 Offers Over Savills

Martinh

The overall cost was circa £570k

Martinh

If you look at google streetview ML8 5AA (it shows as no9) image was take during building phase.

shoppaholic_returns

Mortgage valuations are usually a little different than EA valuations,as alot of EA's overvalue property, this isnt a surprise!

Mortgage surveyors usually air on the side of caution, so I would expect a valuer for a remortgage to down value at least £100k on a property of that value, especially on the current market.

Maybe it was that your proerty was overvalued by the EA in the first place anyway???/

Cannon_Fodder

Looking at Rightmove entries, apart from the one below, they rarely seem to mention overall footage/meterage. There's more to it than that. Number of bedrooms, reception rooms etc...

Having said which, this one, http://www.rightmove.co.uk/property-for-sale/property-15951468.html 5000 sft, or 460 sqm, for £495k, could be used for comparison.

Plenty of developers have lost money on builds in the last couple of years. If 10% of your build cost was "influenced by personal choice", i.e. not earning the money back due to over-specification or personal taste, and then you adjust the £495k property by 10% for being 40sqm smaller, you get to say £550k, which is within the margin of error from the survey figure - espcially if there has been no previously property of that style/size/substance on the street.

Would definitely take EA figure with large pinch of salt.

http://www.rightmove.co.uk/property-for-sale/property-24675454.html
http://www.rightmove.co.uk/property-for-sale/property-11375820.html

look nice, for that sort of money, too.

Henry_P_Chester

EAs always overvalue, which causes obvious problems in a slow/falling Market.

Here's what the Yorkshire building society are currently saying on the subject.

Important information regarding property valuations


Please be aware that in the current housing market property prices are falling in many areas of the country. This is likely to affect the value of your property when you come to apply for a mortgage, and potentially your choice of mortgage product.

We obtain a mortgage valuation (or property assessment figure) for all house purchase and remortgage applications, in order to calculate the proportion of your loan compared to the value of your property (this is known as the Loan to Value or LTV) and the suitability of the property as security for a mortgage. As such, the mortgage valuation will not necessarily reflect the value an estate agent feels someone would be prepared to pay for the property

This could result in your property being valued at less than you told us and may also mean that you no longer qualify for a product with a specific LTV. If this happens you will have to switch to another product with a higher LTV, or it may mean that we are unable to offer you a mortgage.

If we are unable to offer you a mortgage after your mortgage valuation, any product application or valuation fees would not be refunded, so it is essential you are as accurate as possible when providing us with an estimated value of your property.

There are various websites that provide estimates of current property valuations and house prices and we would encourage you to look at these prior to telling us your valuation of the property. This will help to ensure the figure that you provide to us is as accurate as possible and increase the chance that the product that you select on application is the one that you will be able to proceed with following the application.

http://www.ybs.co.uk/mortgages/current_products/property_valuations.html

Martinh

I took the time to work out the sizes of the individual floor areas for each house, to give me a comparable. the houses you have links to are all some considerable distance from the town centre and really only say Carluke because it's the nearest major town.
The property below is known to me, the owner is a developer and is looking for quick cash to fund his business (hense the fire sale price).

property 15951468 (new user wasn't allowed the link)


I had taken the EA price lightly and was expecting the valuer to come back with a reserved price in the region of £650k-£750, this would have put me into the LTV position I wanted for a fasttrack.

Having dealt mainly in commercial property in my business life sqm values are easier for me to understand.

The house size would not be comparable with the street average until I chopped 211sqm off it.

PS a 1.5 acre site 25m down the street went for £1,450,000 in 2003

poppysarah

If you really believe the EA would sell it for his "promise" ... erm I mean valutation ... then try and sell it for that much.