Above Market Valuation Mortgages.

cherabelle

Hi All,

Just looking for some basic advice. I think I know the answer already but I wanted to check beforehand.

I have been living in my flat for over 2 years now and my landlord keeps offering for me to buy it. Last year when it was orignally discussed I assumed it would be worth about £110k, agents agreed with me but my Landlord said he wouldn't sell for less than £125k but ideally was looking for £140k. We agreed I was not in a position or prepared to pay over market value for the property. It all quietened down but then yestrday I got a message from him asking me if I would like to consider buying again if he were to pay £500 towards the solicitors costs and the stamp duty.

I don't expect that this property would get anywhere near stamp duty but my biggest question is (and this is so I can tell him) I, nor anyone else would be able to get a mortgage on a flat for more than 95% of the value of the property. Is that correct? I am not prepared to pay over the odds for the place but I dont see it even worthwhile me trying to negotiate with him if I can't get a mortgage for any more than what agents say the property is worth.

Could you just confirm this or put me straight as I think it may help me talk to him.

Thanks in advance.

kingstreet

You will be able to borrow 95% of the purchase price or the lender's surveyor's valuation, whichever is lower.

Subject to status, of course.

audigex

Your landlord is being astonishingly unrealistic, but Kinstreet is right that you have absolutely no chance of getting a mortgage of more than 95% of the property value

Unless he's willing to drop to whatever level your agent values the property (and therefore around the level mortgage company's valuer is likely to value it at), then this is a complete non-starter.

Surely there are others in your block up for sale? It's rare to see a block of 100+ flats without at least a couple for sale

cherabelle

He is massively over estimating the market (He lives in Hong Kong, I think he belives the UK is back to normal in terms of the market price).

There is only 8 flats across 2 buildings where I live, it was a new build within a new estate about 6/7 years ago and since when he purchased it for £105k in 2009 the only sale that has gone through was for a 1 bed flat below mine which was for 70k. I have a 2 bed so I do not see it been double.

I tried to explain to him that I only thought it would be worth around £110k and 2 agents valued it at that but he doesn't seem to agree. I have no checked the web and found some loan to value ratio quotes which I can use to show him. Hopefully this will help so I can speak to a Mortgage advisor.

Thanks for confirming my thoughts.

amnblog

He wants to pay you £500 in return for you paying £15,000 over the odds?


Nice.