VERY Low Valuation! Help Please

Caladan

farley_85,
Buying your first place can be really exciting - The trouble is, it can also lead to those good ol' rose tints.

I don't know much about London house prices, but shelling out £500k for a 1-bed? Sounds crazy to me. Do you know the situation on the lease as well? As duration left on the lease can affect the sale price too.

I understand what you're saying about Sq Ft, but as others have said, that's not really relevant in the U.K. Bedrooms and Bathrooms seem to be the big sellers.

Just putting a partition in and having another (small) bedroom wouldn't have the impact you seem to think, my parents did exactly that, making the bathroom smaller and having a small 3rd bedroom, and it barely touched the price because it just seemed too cramped.

Are you serious about properties going for above the asking price?

London is one messed up City, God bless it.

Good luck with the house hunting, I'm sure you'll find the right place for you and this might be it, but take note of the comments people have posted here - You're opening yourself up to a world of hurt if you pay over the odds.

Kind regards,
Cal

Thrugelmir

farley_85 wrote: »

It's not a new build but a converted warehouse flat.

NW valuation policy:-

Nationwide instructs it's valuers to value all new properties (flats, houses and maisonettes) on an 'as new' basis.

New properties may include a new build premium. A new build premium is the additional value in a property that diminishes once the property is occupied.

'New Build' is defined as a property that has been newly constructed or converted/refurbished (involving major alterations to the fabric of the building, its internal fixtures and fittings and probably its use) and has not been purchased (even if it has been occupied) within two years of its completion.

The 15% under valuation may well be this premium.

farley_85

Caladan:

Thanks very much for you response. Obviously I agree....£475k is a lot for a 1 bed but I definitely wasn't looking at this property through rose tinted glasses. I genuinely thought it was reasonable value for the size and quality, and that was on the back of a year of looking and comparisons with properties friends had bought. Unfortunately I didn't realise what an impact the number of bedrooms would have. Whilst I am in the construction industry my background isn't residential valuations so was basing the value on a cost per area basis. I know this is the way of doing things in the UK but still seems a bit crazy. Where's the distinction between 2 identical flats which are both 1 bed, but one is 500 sq ft and one is 900 sq ft? This is what is essentially happening as all other 1 bed flats in the area that have been sold in the area at £400k have been about 500 sq ft. I'm obviously assuming that none of these paid way over the valuation! Although you never know maybe.....they all paid £75k too much!!

ThrugelMir:

Really appreciate that bit of research. It's a good point and might well be made in the surveyor's response to the appeal. However, whilst I said it was newly converted, there was a specific question in the report that asked:

"Is this property a new build or has been recently renovated or refurbished" to which the surveyor put "NO".

I presume this particular question was put in to address the bit of nationwide policy you mention, but since he answers "NO", then surely he should not be accounting for a immediate drop in value due to it being occupied for the first time.......

farley_85

Caladan:

Sorry forgot to say, the lease has 113 years left to run so no problems there. actually the surveyor put 99 years in his report so not sure if that will have affected his valuation.....??? maybe a point of contention.

As I mentioned the property is large and I THINK putting a bedroom in, which could quite easily be the same size as the main bedroom (approx. 220 sq ft) would not really affect the layout as the living / dining / kitchen space is 660 so this would be reduced to 440 which is still a very good size and would still be well proportioned. Anyway, who knows, at this rate I won't matter! I appreciate your comments and passing on your experience!

Caladan

Farley,
I'm no expert when it comes to valuations, but is £75k worth paying to get a bit more space for the cats to roll around in?

Maybe it is, and as people say it's really all about what you want. I've found people on these forums, whilst generally helpful, are also quite blunt and ask the hard questions your friends and family (or indeed Mortgage company) wont.

Space is more important for commercial properties, much more important. Space in a residential property is a luxury, and in London I imagine even more so!

Edit to respond to your second post:
99 years on a lease is fine. As a rule of thumb from my experience (and brokers may disagree with me, in which case their opinion trumps mine) if the Mortgage term ends with at least 50 years left on the lease the lender wont be concerned.

Kind regards,
Cal

property.advert

I wouldn't live in Hackney as it is a craphole compared to nearby areas. It is out on a limb to shell out half a mil on a 1 bed over there whereas go back to N1 or even N16 and you are fairly solid in your valuations.

However, N16 was and is the poor relation to N1 and back when I bought into N1, no-one bought N16 to live in. The same is now true of Hackney, where displaced people from better areas are desperate to buy anything that they will pay daft money to get on the ladder.

Just think of who you can sell this 1 bed place to in a few years time ? If you think it will be £700k or more, it won't because when you can afford nigh on a million, you don't buy a 1 bed flat in Hackney and that is why the valuation is what it is.

farley_85

Caladan:

Thanks for the response. No, of course it's not worth paying and I never would. However, I do think this valuation is inaccurate but obviously if we end up getting another survey which comes in again at 75k lower we will considerably lower our offer. I am happy to walk away if it can be proved the valuation is accurate.

Property.advert:

I hear what your saying and that is something I had thought about but equally it's all relative. Go back 10, even 5 years ago and tell someone that a 1 bed flat in hackney in 2013 will be worth £400k I think they would have laughed at you. Obv no one knows what will happen with propert prices but I do agree that a 2 bed would be a safer bet for the money we are spending

dunstonh

Thrugelmir wrote: »

NW valuation policy:-



The 15% under valuation may well be this premium.

Especially as we know that the asking price has not been knocked down. The valuer would know that too.

jules888

So glad i live in the north!In the nice town of Yarm.Got our 4 bed detatched house for £165,000 5 months ago.Needed some refurbishment which has cost £9000.