New build survey down valued

Sparx

I'm in the process of purchasing a new build off-plan and using the Help To Buy (Equity Loan) scheme. We reserved and paid the reservation fee with the developers earlier this month, one of the big reputable firms so all good.

We are going through the developer's preferred mortgage broker and solicitor. I don't mind this as the broker I've had positive feedback from friends who have used him and he's a nice bloke and is whole of market (no problem). The preferred solicitor is a small local family run firm down the road from me, we decided to use them anyway as I have family who used him in the past, his rates are very competitive and he is good at his job (no problem). So we are not bothered using the 'preferred' broker and solicitor.

The broker assessed and found us our ideal mortgage, turns out it's a very competitive rate and with my own bank Nationwide on a 5 year fix! Fantastic, this suits us as it will run in line with the first 5 years of the interest free government equity loan.

Survey completed and the lender's surveyor down values the home 5% of the purchase price. Great for us! Bad for the developer they are not happy... The developer can not appeal this as they have sold 2 of the exact same houses in the last 12 months approx. 6-8% less than what we are paying now and they have drives and garages! Our home has no drive or garage, but has 2 allocated parking spaces at the front yet has a whole 20 square foot more to the house... The developer's at the beginning of the year put up the prices thinking they are worth this, obviously not...

The developer has said they will come back to me more in detail this week, but the short of it is they want us to try apply through Halifax. My question is WHY should I? Spoken with our broker and Halifax only have a 2 year fix for HTB mortgages. The developer have offered to pay the new mortgage product fees but I don't care. In the long run I will be much worse off if (and they will with my crystal ball!) interest rates pick up after 2 years. I would've had barely any time to build equity in the house compared to 5 years. I will be severely limited with my available re-mortgages as using HTB is already limiting. We will be in a much worse situation if we are 'forced' to go through Halifax on a 2 year fix.

I'm happy to pay the purchase price really, but obviously can't if the initial lender will not lend on it... The broker said no point bothering with NatWest as they would possibly also down value and deduct the carpets off the purchase price, our only added incentive.

We really want the house and love it, there are no other new builds in our area at an affordable price - hence I don't care paying the price but can't help it if lender(s) thinks otherwise. :rotfl:

Currently I want to dig my heels in, tell the developers to ram it and stick with the surveyor's value if there is no other way round it. Surely they can not force us to go to another lender and put ourselves in a much worse financial situation? I mean what will they do when other purchases come to buy the same house? "Yes you can but you must go through Halifax as other lenders do not think our houses are worth the price!?" I mean what if I do end up going through Halifax and they down value the house as well!?

Sorry for the rant.. I just want to see what my rights and options are from other experienced buyers and brokers experience?

Many thanks for reading my epic wall of text!

charleyroo

personally i think you should dig your heels in and walk away! i get what you are feeling about, being happy with the price as it is... BUT you are also thinking sensibly in that going with Halifax could leave you much worse off and in a worse position in a couple of years when the builder is long gone - why should YOU have to pay in the long run for the builder overpricing his stock.

walk away, they will be back sniffing around your heels soon enough, because everyone else who comes looking at that house will be going through Nationwide if their rates are coming in at the cheapest, and they will get the same answer from the surveyor.

Sparx

I really do want to walk away, but I want to move asap and there are no other new build homes around here that are affordable. I could go for a pre-loved home but we don't have the money, time or energy to spend refurbishing it to the standard of a modern home / new build.

Do I actually have any grounds for complaint to the developer's head office regarding this? Even though they are the ones instructing the 'go try Halifax'? What could happen if another lender also down value the home? Surely they will then have to accept they are over-priced.

And how can they force us into a worse financial situation? It just isn't right! Would the FCA have any say in this? Not sure if they have jurisdiction as it isn't directly related to the selling of mortgage products.

I've already paid out nearly £300 to Nationwide in the upfront fees! Also I've paid the developer a £500 reservation fee, but their res form states if we don't go ahead they 'reserve the right to deduct £300' how can this be enforced? I can get a mortgage offer, but not at their inflated prices obviously (even though I am happy to pay the full asking price!) just not with another lender for a mortgage that is NOT for me, 2 years over 5 etc etc.. Otherwise why bother going through their 'preferred broker' if his suggested mortgage that is best for ME the customer isn't satisfactory because they don't like the survey's opinion?

Sparx

Bump - threads dropping pages already

thequant

Sparx wrote: »

I really do want to walk away, but I want to move asap and there are no other new build homes around here that are affordable. I could go for a pre-loved home but we don't have the money, time or energy to spend refurbishing it to the standard of a modern home / new build.

Do I actually have any grounds for complaint to the developer's head office regarding this? Even though they are the ones instructing the 'go try Halifax'? What could happen if another lender also down value the home? Surely they will then have to accept they are over-priced.

And how can they force us into a worse financial situation? It just isn't right! Would the FCA have any say in this? Not sure if they have jurisdiction as it isn't directly related to the selling of mortgage products.

I've already paid out nearly £300 to Nationwide in the upfront fees! Also I've paid the developer a £500 reservation fee, but their res form states if we don't go ahead they 'reserve the right to deduct £300' how can this be enforced? I can get a mortgage offer, but not at their inflated prices obviously (even though I am happy to pay the full asking price!) just not with another lender for a mortgage that is NOT for me, 2 years over 5 etc etc.. Otherwise why bother going through their 'preferred broker' if his suggested mortgage that is best for ME the customer isn't satisfactory because they don't like the survey's opinion?

Hmm interesting,


My financial circumstances are quite complicated, which I wont go into. But the upshot is that vast majority of lenders wont touch me with a bargepole.


After a contacting a broker I discovered 2 banks that would lend to someone in my circumstances. one of them was Halifax which I refused as they would only do a 2 year fix, and I wanted a 5 year fix which the other bank offered.


I came under a lot of pressure to use the Halifax which I refused, but I did get the impression that somehow the Halifax are considered a bit lax with their lending compared to other banks.

Sparx

Definitely. The broker did initially try pressure us with the Halifax and I refused due to it being only a 2 year fix. He and the developer did again heavily suggest today if we 'need to try' Halifax they are much more slack on their lending criteria.

I'm not happy with the developers attitude towards this though. Why should I pay their inflated prices and go with another lender to suit them? Hence mew ordering if the FCA would be interested but I doubt it as it's not directly related.

Although saying that it's one of the options the broker provided the developer.. They will obviously not drop the price without a fight.

Thrugelmir

Sparx wrote: »

Why should I pay their inflated prices

Either you do or you don't. The developer has set their price.

Only pay for something what you consider it to be worth.

Sparx

I think you've missed the point. I already stated I'm happy to pay the purchase price even if over inflated a little, but I can't if the lender will not lend on it.

What I'm not prepared to do is go with another lender which puts me financially in a worse situation and only on a 2 year fix.

Can the developer pick and choose the lender their buyers go with? I've already gone with their broker and he helped decide our ideal lender and product. Now the developer is wanting to try someone else to suit their inflated prices.

hcb42

no he cannot pick and choose, but then he doesn't have to accept your offer either

Not that I would pay more, of course! But you might be at stalemate if you cannot persuade them to accept your very decent revised offer

Building_Surveyor

Sparx wrote: »

I think you've missed the point. I already stated I'm happy to pay the purchase price even if over inflated a little, but I can't if the lender will not lend on it.

What I'm not prepared to do is go with another lender which puts me financially in a worse situation and only on a 2 year fix.

Can the developer pick and choose the lender their buyers go with? I've already gone with their broker and he helped decide our ideal lender and product. Now the developer is wanting to try someone else to suit their inflated prices.

If you think the prices are inflated don't buy it... From the developers perspective if there are other buyers round the corner who are happy to go with Halifax it's going to be a no brainer for them. They want asking price, if your prepared to pay it then Halifax it is.

Sparx

The other point was, what if Halifax down value as well? They don't even know if they will survey the house at their asking price. They have sold previous homes the same but with a garage and drive not even 12 months ago for approx. 8% less.

I already said yes it's inflated I'm aware, but still happy to pay the premium. It's the lender who is not.