Halifax Valution Lower Than New Build Asking Price

Profoundry

Hi there,

This is a bit of a complex situation so please bear with me. I will try my best to summarise our quandary.

We are buying our first house which is a new custom build by Urbansplash at New Islington, a new development in Manchester centre. It is being bought offplan and allows various custom options and spec to make it our own.

We are using the Help To Buy scheme for 20% deposit. We have an IFA who is our direct line of communication with Halifax.

Essentially our initial House order had an asking price of £234,000 (base model plus including £15k wooden floor and stairs, £8k kitchen island and £7k two bedroom partition) was valued at £215,000.

We then went through and rethought our spec to get the asking price nearer to the valuation. We originally took away the partition and flooring with the intention of doing these ourselves once bought. At this point Urban Splash agreed to split the difference on the kitchen island and pay £1500 themselves. Because of removing a planned partition and reducing the bedrooms, Halifax claimed we would need another £430 valuation survey.

So we had a rethink and now reluctantly intend to go with the two bedroom format, no flooring and no kitchen island as a comprise. We believe this is a compromise we shouldn't have to make as Urban Splash are adding £10,000 onto the asking price simply because our plot is a later phase. That plus the over pricing of all internal spec elements means we are never going to get a valuation and asking price that match.

We are currently waiting to hear whether the above change to plans need a new valuation survey (costing another £430) or just a review. Once we have a valuation for the new format, we will then know how much of a shortfall their is between the valuation and the asking price. Based on info from our IFA we estimate an approximate £7k difference. That is obviously not money we have spare. We therefore intend to heavily negotiate with Urban Splash to a point that involves the least financial compromise on our part.

I wanted to get your view on how common this is with other new build buyers and how they got around it. Or alternatively how you recommend we get around it.

Regards,
Col

Thrugelmir

Profoundry wrote: »

Essentially our initial House order had an asking price of £234,000 (base model plus including £15k wooden floor and stairs, £8k kitchen island and £7k two bedroom partition) was valued at £215,000.

Your £30k of extras is only adding £11k of value. Hardly surprising given the property price and it's likely resale value. At the prices quoted you'll never recoup those outlays.

nidO

Profoundry wrote: »

I wanted to get your view on how common this is with other new build buyers and how they got around it. Or alternatively how you recommend we get around it.

Generally by offering and ultimately paying less than the list price, rarely will a mortgage valuation end up as high as the list price for a property if you're paying the developer's extorionate rates for added extras that add little value to the property.

SuperHan

Although not with Halifax, a friend of mine had a similar valuation issue with their apartment.

I mortgaged my 3 bed apartment (2 years old ish) with HSBC for £190k. A friend of mine looked to buy the apartment three doors down from me. It's two bed but they were looking for a v quick sale and so were marketing at a loss and for £100k. He tried with HSBC to get a mortgage and they wouldn't value at more than £90k. This is with the same lender and less than 6 months apart (nothing has changed in the building or vicinity which would cause a loss in property value).

This is the same lender within a short period. You may find getting a different revaluer to do yours will have a better effect no matter what you do.

My point is these things aren't a science and can be a bit hit and miss, just having someone else value it may make a difference.

Profoundry

Thanks for your comments folks. I dont think I have any say who does the valuation survey for Halifax. I believe they use Esurv.

amnblog

You don't have a say. Halifax use Colleys.

Profoundry

amnblog wrote: »

You don't have a say. Halifax use Colleys.

Oh thanks. Good to know.

Profoundry

amnblog wrote: »

You don't have a say. Halifax use Colleys.

FYI I can confirm that in this instance, Halifax are using Esurv.

kingstreet

Profoundry wrote: »

FYI I can confirm that in this instance, Halifax are using Esurv.

Colleys is owned by LBG, so usually retains the business in-house.

If Colleys is too busy, or has no coverage in the area in question, the work can be panelled-out to any other valuer on the LBG panel.

That is what will have taken place here.

audigex

Buy without the extras and pay for them as you go along? That way the mortgage matches the valuation.

amnblog

Looks like Halifax won't mortgage the Urbansplash profit.