Lender valuation vs. London property market inflation?

redonion

Being a bit dim, I've only just realised that the "V" in "LTV" really does mean value as in valuation, and not purchase price.

So now as an FTB, I'm worrying about what the valuation will be. Certainly it was pretty hard to decide how much it was worth paying for the London flat I've offered on, with prices going up so quickly.

Obviously I'll have to wait for the lender's valuation to know in my case, but in general, do lender's valuations tend to lag the market? Also, in which direction does internal condition (kitchen, bathroom, etc.) affect the discrepancy between lender valuation and market price? i.e. given two properties, one with a beautiful shiny kitchen and bathroom and one with a run-down but serviceable one, for which property will the market price and lender valuation tend to be closest together?

Expecting to go with Abbey, how long would you expect from application to getting their valuation?

MGCP

My mortgage offer has just come through from Abbey. I had the same concerns, buying in London, market has shot up and the price we offered was £50k over the advertised OIEO. The valuation was fine, they are happy to lend. Of course until we exchange I'll be worrying about gazumping as I reckon if "ours" was offered again now it would beat our price. Fingers crossed!

Wh05apk

"Normally" lenders valuations tend to match purchase price, unless they feel you are dramatically over paying, afterall, the valuation should reflect market conditions, if you have just paid £x then presumably that is what the market is demanding?

There are serious problems in some parts of London getting valuations done at the moment, in some parts they are taking up to a month, although the situation is slowly improving.

vectistim

Wh05apk wrote: »

"Normally" lenders valuations tend to match purchase price, unless they feel you are dramatically over paying, afterall, the valuation should reflect market conditions, if you have just paid £x then presumably that is what the market is demanding?

It would be much more fun if the valuers were not told the agreed sale price.

opinions4u

vectistim wrote: »

It would be much more fun if the valuers were not told the agreed sale price.

I predict it would make these pages much busier!

"I want to pay more than the valuer says it's worth" threads would grow like bacteria in a sewer!