new build mortgage valuation success rate

renegade1

Hi,

What is the mortgage valuation success rate (i.e. valuation matches offer) on new builds? Given that new builds have a premium, is this taken into consideration during the valuation? Or does the valuation treat new builds the same as a second purchase home? If so does that mean the chances are higher for a failed valuation on new builds?

Are new build developers more willing to renegotiate the price if the valuation fails compared to say non new build sellers?

Sorry if this seems jumbled. I have just woken up and haven't had my coffee yet.

Tiglet2

My daughter has bought a new build. It has taken three valuations to get the one which matched the sale price. The developer was unwilling to negotiate the price and I don't think the premium price on a new build was taken into account. Maybe if the LTV was better, it might not have been a problem, but my daughter bought with the Help to Buy Equity Loan so there was not a lot of wriggle room.

Nebulous2

I've no idea about success rates. However the new build premium has increased, largely due to help to buy, and concerns about where house prices could go is rising.

It would be negligent if surveyors weren't tightening valuations a notch and that seems to be reflected by posts we are seeing on here. Some people then report success in renegotiating and some dont.

SallyDucati

Some new build developers will negotiate on sale price at point of offer, mine did by 5%. After valuation though I'm not sure, could depend on how well the houses are selling. Large national developers may also be more strict (mine is a small local).

The valuation for mine came in OK so no issues on that side of things.

renegade1

Thanks for the replies. Seems a bit hit and miss. I have already negotiated 6.5% off the listed price so I hope the valuation matches that :eek:

kingstreet

You tend to see valuation problems more at the beginning of a development, before experience of the local surveyors settles everything down and comparables start to stack up.

Builders get block valuations done in advance with the corporate surveyors and these are usually relied on until the first release and proper mortgage application and valuation is done.

During the build and at this time of year, you may get one or two issues due to out of area surveyors being unfamiliar with a development and this can result in the need for a further valuation or replacement mortgage application.

Builders will be reluctant to reduce prices as these will have a knock-on for the later comparables, so incentives will be used instead where possible.