Valuation below sale price and previous sold pric

andyvan

So I'm a first time buyer in the London area. The property I'm buying is in London (Zone 5).

I had an offer on a flat accepted for £219,000. It was on the market for £225,000 and, according to Right Move records, the same property sold for £212,500 in February 2016, more or less exactly two years ago.

The lender's valuation has now come back at just £210,000, less than the property sold for two years ago! I'm amazed.

The stated reason is the nearby overhead power lines and a "noisy" railway line which could affect resale. I mean, it's double glazed the railway is a branch line with only two trains an hour in each direction, and it's a slow suburban line.

I was prepared for the possibility of the valuation being lower, but being below the sale price two years ago is incredible to me.

Did vendor massively overpay, or have I just got unlucky with the survey?

My conundrum is I could go with another lender and see how it shakes out, but I could easily get the same surveyor picked from the panel. I'm sure I can get some money knocked off the price, but they rejected £216,000 before and I can't see them taking a loss or break even result.

Anyone had similar experiences?

Thrugelmir

May simply reflect a softening of prices in the locality.

How long does the lease have to run?

What's the general condition of the entire building like?

Cakeguts

It might be that the area is becoming less popular for some reason. It isn't anywhere near a proposed new railway line?

societys_child

On the other hand, it's a surveyors opinion.

andyvan

Lease is 99 years, which could be a factor, but it hasn't been mentioned as a reason.

Condition is excellent. It's a 90s development and the flat is up to date.

andyvan

Not really. It's part of the proposed Crossrail 2 route, but that won't actually mean any building on this part of the route, just an increase in frequency. If anything it would improve the value for commuters.

Suppose it's possible, but again this is London. It's one of those areas that's increasing in value because other parts unaffordable. That's why I find the call so weird.

Asl77c

Previous buyer might have been a cash buyer, so wouldnt have had a valuation survey carried out and that might be why they paid over the possible price.

Crashy_Time

andyvan wrote: »

Not really. It's part of the proposed Crossrail 2 route, but that won't actually mean any building on this part of the route, just an increase in frequency. If anything it would improve the value for commuters.

Suppose it's possible, but again this is London. It's one of those areas that's increasing in value because other parts unaffordable. That's why I find the call so weird.

Except for this flat..?

Mutton_Geoff

andyvan wrote: »

Lease is 99 years, which could be a factor, but it hasn't been mentioned as a reason.

Condition is excellent. It's a 90s development and the flat is up to date.

Are you sure the lease is still 99 years? Quite often they are listed as "99 years from 1995". If it's an early 1990s development, then it could be 25 years old or more which means the lease only has 74 years left.


This is about the limit for a heating system, boiler etc, so there could be some costs just around the corner.


On the other hand, it may have had a 125 year lease when built, and 99 years remaining as you say. 99 years would not be a factor in a valuation provided it doesn't contain those nasty modern inflated escalating clauses.

ReadingTim

andyvan wrote: »

I'm sure I can get some money knocked off the price, but they rejected £216,000 before and I can't see them taking a loss or break even result.

The way to play is would be to explain that if your surveyor downvalued it, there's a good change another buyer's surveyor would do exactly the same. The vendor has to take that chance, or hope they can find a cash buyer (who could play the cash buyer card and offer lower anyway).

ACG

You can try another lender or try to renegotiate the purchase price?

We had one 3-4 months ago where Nationwide down valued the property and the Natwest were fine with it. This was a remortgage and the valuation affected the LTV.