Disaster - HSBC have valued the flat at 20k under what I offered

ForzaFifer

HSBC told me and the EA that the valuation was carried out by someone on their own panel of surveyors, that’s all I know at this point.

Mortgage_Adviser

Ask for the copy of the survey. That way you wil know which company did the survey. If you then decide to go to a different lender the broker of yours can check with the lender which survey company the other lender uses in order to minimise the chance of ending up with the same surveyor.

[Deleted User]

We had a similar situation in London recently. Nationwide valued it at £18k less than our offer. We were quite surprised as we had gotten the property significantly under asking price.

We weren't really prepared to go another lender as we had decided we wanted this particular lender and rate etc. And you're not guaranteed you'll get the valuation you want from a new lender
It seems to be quite common in the current marketplace.

We went back to vendors and managed to negotiate money off (not all) and we made up the difference ourselves, as we felt comfortable based on similar properties in the area that we hadn't massively overpaid.
I would try the vendors/estate agent as a first course of action....

ForzaFifer

the EA finally got back to me, the vendor is willing to sell it at 260, but i would need to extend the leasehold, its currently only got about 70 years left.

or i can make a final offer on the flat. Or walk away i suppose.

I dont really know what to do, i think extending the leasehold will be very expensive for me, so im not wanting to do that. Any advice here from people with experience of house buying would be greatly appreciated.

ACG

That will likely be the reason for the down valuation. So if the lease would be less than £15k to extend, you are buying for a similar price to other properties I am assuming?

If it would be more than £15k you are worse off and better off if less than £15k?

ForzaFifer

I’m not all that clued up about leaseholds, but I’m pretty sure it would cost quite a bit more than 15k, I don’t think I can even extend it until I have owned the property for over 2 years? Also, the bank might be less willing to give me a mortgage on a flat if the lease is under 70 years. Is that right?

Flats in the area aren’t selling much at the minute, so I can’t tell how much they have been going for.

chunkytfg

ForzaFifer wrote: »

I’m not all that clued up about leaseholds, but I’m pretty sure it would cost quite a bit more than 15k, I don’t think I can even extend it until I have owned the property for over 2 years? Also, the bank might be less willing to give me a mortgage on a flat if the lease is under 70 years. Is that right?

Flats in the area aren’t selling much at the minute, so I can’t tell how much they have been going for.

Read this

https://www.moneysavingexpert.com/mortgages/extend-your-lease/

with 70 years only left expect it to be very expensive

ironmanjason

I am no expert either but why would you want to spend so much money on a property you will own for just 70 years? Selling a property with such low leases are extremely difficult I've heard. When I was doing my research on freehold v leasehold a few months ago I could see you can extend lease for about 15-20k so as suggested previously that could be the reason for under valuation

LRmortgage

Unless you are willing to extend the lease, I would probably be walking away from this purchase with only 70 years remaining.

If you buy and don’t extend you will have issues remortgaging or selling further down the road.

ForzaFifer

I’m not sure that’s why it was devalued to be honest, would the bank know how long there was left on the lease when they went to value it?

I’m not keen at all on buying a property with a short lease, I was being told the vendor was in the process of renewing it and it would have at least 125 years on it.