Mortgage valuation well short

illmonkey

Me and my partner bought a place at the beginning of the year, costing £140k. It was then valued at £147k by the mortgage firm (halifax).

We've had debt since we bought the place, and we can only pay minimum payments each month, so nothings changing.

We have decided to do something about it, so i looked into a "further advance" to release some money from the place to sort out the debt, and lower our monthly out goings. Which in turn means we could live without struggling and with the extra money, either save or overpay the mortgage.

We had it valued by a local estate agent, who has said its worth £175k, as well as 2 estate agents i know verbally agreeing with this figure.

I apply for the further advance, and im told i need it valued to see if the valuations I've had are good. So i agree. It comes back at £155k! With this and due to there "affordability calculator" we cant afford to borrow anything!

I've disputed the valuation, saying its far too low etc, but they're having none of it, and saying that other flats locally (on estates or ex council's) are selling at that price, so mine would too.

I feel i have been ripped off (£120 valuation charge) because of the low valuation. And now we have no hope in getting any additional money to pay off the debt we have.

If we sell, we have the hassle of moving and fee's etc. If we re mortgage with an other company we have a 2% charge for cancelling our mortgage early!

Have they under valued it on purpose?
Where can we go from here?

jamief

1) An estate agents "valuation" is an opinion, which is very different from the professional valuation given by a surveyor (in my opinion).

2) Why don't you pay a local (accredited) surveyor to do a valuation on your house? If they are accredited, you won't have to pay your mortgage company to do another valuation.

It sounds to me that the estate agent(s) have simple overvalued your house.

lisyloo

I would try looking on one of the free websites like
https://www.nethouseprices.co.uk
to look at REAL sale prices in your area.

You can then decide whether you it's been valued fairly or not.

The prices the estate agent gave you may well be the price that they recommend that you ASK for it.
Sometimes these prices have to be reduced.
Very often sale prices are lower (say 95%) of asking prices.

This is why I suggest you check out REAL sale prices.

It won't cost you anything and you will know whether you have a case to make a complaint.

illmonkey

Thanks for the reply.

They have based their valuation on houses in the town etc. Most of the prices they used (and the've told me this) are from streets/areas far from mine and are on estates/ex council areas.

There is also a 2 bed (same sq ft) flat next to mine that sold for £189k. Now i know a second bedroom adds money, but this room is a shoe box (as its the same footprint of my flat), but for it to add £34k is riduclous!

We feel they have just made a quick £120, i mean the valuer was only at my place for a maximum of 10 minutes!

edit: lisyloo, i've looked at a similar site, and theres 2 flats in my block (2beds) that recently sold for £190k +. The flats they're comparing mine too are not as big, not got a garage and on/next to a estate with affordable housing.

regularsaver1

Halifax usually use their own surveyors from the HBOS group - Colley's, if not they will panel out.

The Halifax will go with what the surveyor has said.

Remember estate agents are on about a figure, of receiving offers under the asking price.

Do you really feel your property has increased from £140k to £175k in the last year?

Halifax use an affordability model and stick to it, they will lend up to 97% of property value, as provided by surveyor-

lisyloo

If you really feel ripped off then ask for their formal complaints procedure.

Compile all your evidence (real sale prices will certainly help although obviously they will need to be similar houses) and then send it in, in accordance with their complaints procedure.

Ultimately you may be able to take this to the ombudsman but you must go through their complaints procedure first which may involve writing a few letters.

It costs them about £350 if you go to the ombudsman so they may give you your £120 bak rather than spend lots of time arguing with you.

Personally I think you are unlikely to get them to change their minds about the value but you might (eventually) be able to get your £120 back.
Be aware that this will take some patience and letter writing.

regularsaver1

I think the problem is that when you apply for a further advance in the illustration it states that there is a revaluation fee that is non-refundable. You agreed to go with this.

You may be able to complain directly to the surveyors instead to see the report and to find out why