Help to buy - Down Valuation and change of lender

owen17

kingstreet wrote: »

Who is charging non-refundable product fees?

It is normal to investigate the unusual downvaluation on a site when the other properties have reached their agreed prices. It usually only happens when a locum/out of area surveyor comes in for a one-off inspection.

This can be in the form of an appeal, or the lender's newbuild manager speaking to the survey firm.

Brokers are often asked about looking at alternative lenders who use different surveyors in such circumstances. See what they come up with.

What the broker is being asked to do is not indicative of anything other than a willingness to try to keep the sale/purchase alive. As you say, on HTB the valuation and price has to agree and if the builder won't sell it £18k cheaper, you have the immovable object and irresistible force.

We do this when necessary and it doesn't compromise our independence. You make the final decision. We simply provide the facts.

You will get nothing from the surveyor as their contract is with the lender. The lender will refer you to the broker.

The council? Can't see what that would achieve. Is the downvaluation due to a S106 Agreement causing an issue?

Thanks for such a detailed response.
I don't think the developer has tried this option "This can be in the form of an appeal, or the lender's newbuild manager speaking to the survey firm.". I completely understand if they do it, what I find cheeky is just trying to take the shortcut of asking the purchaser to change the lender to see if the new bank offers a better valuation. What if the new valuation is similar?

Thanks also for letting me know MA are asked to change the lenders. At least I see this is part of the normal procedure. However, this same MA allowed me to choose to pay £995 without letting me know at all this could be cancel.

When you say "you have the immovable object and irresistible force.", you mean that I can say, I don't want to change the lender so you either sell at this price or you appeal. Did I understand this right?

I asked the MA if we should contact Santander but has not got back to me. I think the surveyor did not include the non investing clause in the form (he only ticked a "NO" in the "Property to Let?" question. So my doubt is if he would have valued the house even lower.

And regarding the council, is just that they want to do a nice community and regeneration area in this zone, so just wondering what they think of this case. I have never had any contact with them through the process so I am not aware of any issue really.

owen17

Slithery wrote: »

Incentives are all of the extras that you try and get thrown in for free like landscaping, additional sockets, higher spec kitchen, flooring, stamp duty etc.

You negotiate all of this with the developer before reserving the property.

Thanks. The house comes with a basic package like carpets, oven, bin, turf for a little garden etc. I can add a lot more extras though but have not agreed any yet. (alarm, laminate floor instead of carpets, etc)

owen17

Thrugelmir wrote: »

What else is included in the selling price? Fitted kitchen appliances, flooring, bathroom tiling , landscaped garden etc etc. Any other kick backs such as stamp dyty incentive, contribution to legal fees.

Ability to let the property doesn't make it any more valuable from a lenders perspective. Not least that let property may not be maintained to the same standard as a persons home.

Thanks for letting me know non investing clause is not taken into account.
Most of those features you mention are included except stamp duty incentive and contribution to legal fees, and tiny garden

kingstreet

AFAIK Santander will refund the product fee if you don't complete.

Those who choose to add the fee to the loan would not have to pay if they pulled out; so those who pay upfront cannot possibly be treated unfairly.

There are better HTB deals than Santander's in the market. I would use them for specific reasons (non-UK/EU/EEA, self-employed needing latest year's figures for affordability, loan for a deposit etc).

Slithery

owen17 wrote: »

I can add a lot more extras though but have not agreed any yet. (alarm, laminate floor instead of carpets, etc)

If you do end up continuing with this purchase then expect to now pay top price for all of the extras. The time to negotiate getting them thrown in for free was before reserving.

Crashy_Time

owen17 wrote: »

Thanks for responding.
I want the house to live in, not for investment purposes. However I obviously want to buy something for its real value (including all the constraints of leasehold and non investing clause)

In that case you are buying at the wrong time (Brexit) and the wrong type of property (Newbuild) IMO.

AnotherJoe

owen17 wrote: »

T I mean with that sentence just asking the council if they are aware that all this is happening, mainly a surveyor from Santander bank valuing the property at £282k when the developer is asking for £300k

The council literally wont care about that. Pricing is nothing to do with them.

owen17

I have some news. The MA has just called me saying the developer wants me either to pay and ask for a second valuation to Santander, which will be refunded if I pay the house, or to change the lender.

So I guess I have those 2 options or a third one of asking them to appeal the current valuation.

The MA says that the current valuation is down because there are not comparables near the plot and the surveryor doesn´t know the site very well.

Any suggestions always thinking I want to buy the house at a fair value?
Thank you.

owen17

kingstreet wrote: »

AFAIK Santander will refund the product fee if you don't complete.

Those who choose to add the fee to the loan would not have to pay if they pulled out; so those who pay upfront cannot possibly be treated unfairly.

There are better HTB deals than Santander's in the market. I would use them for specific reasons (non-UK/EU/EEA, self-employed needing latest year's figures for affordability, loan for a deposit etc).

Thanks for letting me know. I am non UK EU citizen (Spanish), but apart from that, the MA said this was the cheapest Help to buy option (I required first 5 years fixed term).

kingstreet

There are other lender options for EU citizens at rates as good as Santander's, if not better.

Our Santander rep was in last week and she conceded we needed to look at things other than the rate/fees and "true cost" to make them competetive.

Ask your broker to look at other lender options with a free valuation then it will cost you nothing to see if all this is down to the surveyor who "doesn't know the site very well."