House undervalued - dead end!

Nobbie1967

Why didn't you agree the sale price of £280k with your parents and then inform the mortgage provider of the gifted deposit? Oh wait, didn't the SDLT threshold used to be £250k:rotfl:

Anyway, if you're staying there it won't matter, just make sure you get a new valuation when you remortgage.

MisterB1959

SPD14 wrote: »

The issue in a nutshell, is that those land registry searches will show the house to be worth/sold for £250k, yet it's worth at least £290k! .

land registry is NOT wrong, it will show the house was sold for £xxx in xxx year ! it has nothing to do with how much a property is worth at any given future date, for whatever reason that valuation is necessary/required.


as an example, buy a property at 100k, spend 100k on it, its now 'worth' 300k, yet the land registry will record it as being sold for 100k on its last sale. its irrelevant !


and the tax avoidance issue .........?

SPD14

Nobbie1967 wrote: »

Why didn't you agree the sale price of £280k with your parents and then inform the mortgage provider of the gifted deposit? Oh wait, didn't the SDLT threshold used to be £250k:rotfl:

Anyway, if you're staying there it won't matter, just make sure you get a new valuation when you remortgage.

What are you trying to say

Yep, it probably won't matter once we remortgage. Thanks for your help.

MisterB1959 wrote: »

land registry is NOT wrong, it will show the house was sold for £xxx in xxx year ! it has nothing to do with how much a property is worth at any given future date, for whatever reason that valuation is necessary/required.

as an example, buy a property at 100k, spend 100k on it, its now 'worth' 300k, yet the land registry will record it as being sold for 100k on its last sale. its irrelevant !

and the tax avoidance issue...?

What tax avoidance issue?

I'm sure it'll be looked back on as a storm in a teacup once the dust has settled. :cool:

David301

If it is your forever house then £7200 is an acceptable amount to swallow, how many people drop or add £10,000 to make a sale happen??

You realise in however many years when you decide to sell and downsize into a bungalow and the estate agent comes and says its worth £330,000, but you only receive offers of £270,000, but have seen your dream bungalow that you want more than anything you will also take a hit then?

O and even with a good interest rate you will probably be paying £400,000 for a £250,000 house

Good Grief!!

pinkteapot

I've never heard of a surveyor valuing a property at more than the agreed purchase price. They're not really valuing it - they're telling the mortgage company if it's worth the agreed price or not and in this case the answer was 'yes'.

Even if the surveyor had said £290k, the Land Registry data would still have shown £250k because that's what you paid. What the surveyor says doesn't go on public record anywhere, so why does it matter?

TrickyDicky101

What SDLT avoidance issue? There isn't one! SDLT is based on the consideration - it has absolutely nothing to do with perceived value.

laidbackgjr

TrickyDicky101 wrote: »

What SDLT avoidance issue? There isn't one! SDLT is based on the consideration - it has absolutely nothing to do with perceived value.

You are right not tax avoidance (that's legal) what has possibly gone on here is tax evasion (illegal and potentially prisonable offence).

The consideration appears to be £290k - yet SDLT seems to have only been paid on £250k as the gifted £40k wasn't declared.

Perhaps the OP can confirm what value was used for SDLT?

It sounds like it would have been much better for the OP to have purchased at £290k with a gifted deposit of £40k and saved the £300 pm increase in mortgage!

TrickyDicky101

laidbackgjr wrote: »

You are right not tax avoidance (that's legal) what has possibly gone on here is tax evasion (illegal and potentially prisonable offence).

The consideration appears to be £290k - yet SDLT seems to have only been paid on £250k as the gifted £40k wasn't declared.

Perhaps the OP can confirm what value was used for SDLT?

It sounds like it would have been much better for the OP to have purchased at £290k with a gifted deposit of £40k and saved the £300 pm increase in mortgage!

This is complete nonsense. The consideration is the mortgage and any other cash handed over to the vendors. Presumably that is just whatever the mortgage taken was. The 'gifted deposit' does not form part of the consideration for SDLT purposes.

AdrianC

TrickyDicky101 wrote: »

What SDLT avoidance issue? There isn't one! SDLT is based on the consideration - it has absolutely nothing to do with perceived value.

Which, of course, is the OP's whole complaint.

They cleverly arranged a deal where they paid a nice neat fiver just under the then-applicable SDLT threshold for the place, and are now complaining that it's so unfair anybody might think they paid "only" £250k for a house which they say was worth £290k at the time, now that the SDLT calculation method's changed and such artificial value steps don't matter.

Because the whole deal was based around the SDLT threshold, the surveyor was given a £250k figure, which they've echoed in their report. Except the OP is now worried that somebody might look at that and think the place was only worth £250k at the time.

Unfortunately, though, basing the whole deal on £250k value meant their LTV was higher, so they didn't get the better deal. They now want to remortgage, based on the higher value, giving the lower LTV and better rate.

Sounds very like a desire to have cake and eat it. - get a low LTV mortgage but pay less SDLT.

DRP

Great thread!

I suppose this is supposed to be a money-saving site, but I think most will agree the OP made their bed and now has to lie in it!