Under valued help to buy mortgage valuation, what to do?

Crashy_Time

Back on topic; Not much you can do, the developer is unlikely to budge (at least while they are being propped up by the taxpayer) walk away IMO.

chucknorris

Crashy_Time wrote: »

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They used to say that in Japan I believe........

I can't respond, read Brits post above about keeping the thread on topic.

Crashy_Time

chucknorris wrote: »

I can't respond, read Brits post above about keeping the thread on topic.

Can you respond to my point about developers?

chucknorris

Crashy_Time wrote: »

Can you respond to my point about developers?

I can't see under what circumstances I would buy a property for £575k, when it has been valued twice at £525k (8.7% lower, which is quite a difference!). I would look again at my own valuation, it is easy to think that a property is 'the one' but quite often it is easy enough to find another one.

Crashy_Time

chucknorris wrote: »

I can't see under what circumstances I would buy a property for £575k, when it has been valued twice at £525k (8.7% lower, which is quite a difference!). I would look again at my own valuation, it is easy to think that a property is 'the one' but quite often it is easy enough to find another one.

Ok, I agree, but can he find leverage with the developer because of this?

chucknorris

Crashy_Time wrote: »

Ok, I agree, but can he find leverage with the developer because of this?

Depends, is the development selling well already versus how concerned are they about the current London market and where it might go in the next 6 months (and the fact that more people who also recently reserved might also walk away).

chucknorris

Firsttimebuyer5 wrote: »

Hi

I have been going down the process of buying a new build flat in London using the HTB route and have run into a problem with a down valuation of the property, and looking for some advice.

What has happened so far.

1. Reserved a flat being quoted at 575K by the developer. Paid £500 reservation fee
2. Instructed solicitors & mortgage broker.
3. Asked to sign a help to buy contract at 40% of the £575K asking price.
4. two high street lenders have valued it at £525K (almost 10% less than what the developer has valued it at)
5. Friend buying a similar flat in the same development at 585K has had a different high street lender value the property at the asking price (which is higher than mine!)

From what I understand about HTB, I won't be able to proceed with the purchase as the valuation would need to match what I'm paying. I have approached the developers via email, and they have indicated that they will not be able to lower the price as they have said that other properties have been valued okay.

Are the developers able to walk away from this purchase now? Considering that it is a HTB, if they were to sell this to someone else under this scheme, they would need to get a valuation of £575k from another valuer, and considering that 2 have already come back much lower, what would the chances of that be? If I walk away, will I lose my reservation fee?

I wouldn't despair too much if you end up losing your £500 fee, because if you do decide to walk away, it obviously means that you think that you can save a fair chunk of money by doing so. So in a way, that would be your best result, better to save around £25k and lose your £500 fee.

Firsttimebuyer5

Thanks for your thoughts guys and interesting discussion.

I spoke to the guys at Help to Buy and they said the developer can walk away and not be forced into the sale at a lower price which my solicitor also confirmed. No word from the developer yet but will keep you updated on whether they lower the price to meet the valuation.

As per the comments above, best to take a step back and see what is happening in the London market and hope that there is a price correction.