Remortgaging - do I have to accept lender's valuation

lulin004

Hello all,

I'm really hoping someone can help me with this problem.

I'm about to switch my mortgage deal as I'm nearing the end of my 2 year fixed term with Nationwide (2.79%), I'm sticking with Nationwide as they have some good deals on offer and I'm hopefully going to save a lot, however: they have told me that in order to do the switch, I have to accept the Nationwide mortgage adviser's valuation of the property.

I bought the property in 2014 for £185k, in December 2015 I had it revalued by a local estate agent at £225k as I had done some work on the property and extended the lease by 40 years, but Nationwide are telling me they value the property at £203k - which has a huge impact on the current LTV and therefore the rate I can apply for. they base this on their database of sold prices in my area and do not send a valuer round to the property to verify this.

My question is: can I dispute this and do I have to accept the lender's valuation in order to go ahead with the switch? I have an appointment booked with a Nwide mortgage adviser for 19th November, and I've been told I can debate it with them and we will come to an agreement on the valuation but that they will not accept that replacing single glazed windows would increase the value of my property. I live in Cambridge where the local property market is booming so there is no way £203k is the correct price, similar properties are currently advertised on Rightmove at £230-£240k and nothing here sells for anything under the asking price.

Should I be looking to switch lenders in this case? I haven't yet investigated but have the feeling that this will end up costing me more?

does anyone have any guidance or experience with this that they could share? I'd be so grateful, it's a minefield out there and of course Nationwide want me to be on a higher rate so have it in their interests to make my LTV seem higher than it is

Many thanks in advance,
Lucy

Thrugelmir

You could ask to pay for a proper valuation undertaken by the lenders appointed surveyor.

PDF

Just out of interest, have you put the details into the Nationwide house price index calculator? It'd be interesting to see if that differed to the valuation they have given you.

http://www.nationwide.co.uk/about/house-price-index/house-price-calculator

minimike2

"Valued By Local Estate agent" = Not worth the paper it is written on. I could "value" any property, in a similar fashion to most estate agents. The agents are there to try and make you market your property with them, not to give a mortgage valuation. Forget everything this agent has told you.

Ask Nationwide if you can pay for a valuation. If they allow it, pay it, but that money will be payable regardless if the outcome helps your situation or not.

Some lenders allow this for a rate switch, some dont.

MuTron

I've recently been through exactly the same situation. House in Cambridge, which we bought for £230k 2 years ago with a mortgage from Nationwide. Similar/identical houses in the same area are now selling for around £300k, but Nationwide's house price calculator was calculating it at around £243k. The problem with Nationwide's calculator (the one you use on their website is the same they use internally for refixing the rate) is that it's not particularly fine tuned, with Cambridge falling into the East Anglia area, despite the market here being very different to the rest of the area. House price inflation in East Anglia is set at around 3.5% a year, whereas Cambridge is closer to 15%


Over the phone they wouldn't budge if there wasn't any significant improvements made to the property, so we set up a meeting with one of the mortgage team, who initially said the same thing. We asked if there was anything else he could do, as if they were only going to stay with the value of £243k, rather than our suggested £290k-£300k, we'd have to go elsewhere where it'd be revalued properly. It turns out he emailed the manager, who then spoke to the property risk team, and they agreed to override the value to £290k.


Presumably they'll only consider this if your idea of the value is realistic, and if they think that another lender would remortgage at that price.

minimike2

15%? Not sure where you have got that from..... Cambridge has just seen the biggest deceleration in house price growth in the entire country and has growth nothing like 15%.

This is likely to be the cause of your valuation.

MuTron

I think it's around 8% now, according to Hometrack's cities index, but has been hovering between 10% and 15% for the past few years.


In our case, Nationwide's property risk team agreed that the value had risen 26% since 2014 and re-evaluated it as such


In the OPs case, I would imagine you'd have to be prepared to go elsewhere if they still won't consider anything else. Our advisor never promised anything initially, and we would have gone with another lender if they weren't willing to move on the valuation. Obviously another lender may well give you the same valuation, so how hard you push will depend on just how confident you are on your idea of what it should be valued at

Penelopa.Pitstop

I did complete refurbishment of dated property but Nationwide refused to send valuer unless I extended the property. It was a flat, so no extension was possible as such, just refurbishment. In the end I went for their index valuation as prices went up anyway.

Later, I read here that it's possible to force them to do proper valuation, so I suggest discussing it on a meeting face to face.

somethingcorporate

Weirdly I just applied to borrow more with nationwide and they sent round a valuer, even though it was the same value as when we bought the property plus their application of HPI!

Pointless waste of time/money (on their part).