How Bank Valuation works?

edited 30 November -1 at 1:00AM in Mortgages & Endowments
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kata312310kata312310 Forumite
1 Post
edited 30 November -1 at 1:00AM in Mortgages & Endowments
Hello Everyone,

I am very new to this forum and wanted to share my experience and confusion about the bank valuation I recently had, and hope someone could help with some advice.
Briefly, me and my husband are 1st time buyers with a Right to Buy on an ex-local authority flat on the 14th floor in central Manchester (10mins walk from Arndale) Both are on good salary full time work no dependants there is no financial issue with us.

I already read everywhere it is hard or impossible to get mortgage on ex-local authority flats and after Halifax valuation came back saying:

“The property is not suitable security due to sale ability issues some of which include but are not limited to: restricted lending and limited owner occupiers.
Some lenders do not lend on properties of this type of construction which may affect future sale ability. Future sale ability may be affected because of adverse locational factors: a public sector housing estate. The property is in acceptable condition for lending purposes.”

I really started digging into this.
This building block is on a council housing estate with other 4 similar blocks which of 3 completely renovated already the whole estate is really well managed by the housing association and 2-3 streets away in every directions there are brand new and also still under construction high rise private housing estates.

Our property was valued at £70000 by the council`s valuer and could buy it for £35000 with RTB.
Only 13% of the flats are privately owned in this building, but because all were sold under RTB there is no sign of these sales anywhere on Land Registry, Zoopla or Rightmove as no one sold it after they bought it. In the next door council building only a handful sold as per Land Registry for around £70000 but again the RTB sales are not on.

2 streets away smaller but newbuilt flats are sold between £350,000 and £250,000 In the site that is still under construction smaller than our flat is sold for £165,000

Can someone explain me how my mortgage valuation could come back with saleability issues? Is it because my building is not appearing on Land Registry or Zoopla due to RTB purchases?

We have been living here for 6 years and the area transformed so much to its advantage I really do not understand how the mortgage valuation works as this is our very first time going through this process.
Could someone please give me some advice? Would it be worth spending another £200 for bank valuation and trying it with a different high street bank to see if their valuer has a different opinion and can see what I can. (Small local building societies are more restricted than the high street banks as we are on the 14th floor, I already checked, only a few big high street bank has no floor level limit)
Can not understand how this property cannot worth the bank £35000 when others are selling for £250000 in the same area.

Thank you very much for any advice.

Kind regards,

Kate

Replies

  • edited 31 March 2019 at 12:03PM
    davidmcndavidmcn Forumite
    23.6K Posts
    Part of the Furniture 10,000 Posts Name Dropper
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    edited 31 March 2019 at 12:03PM
    kata312310 wrote: »
    Can someone explain me how my mortgage valuation could come back with saleability issues?
    It's because it's a council multi-storey. A lot of people simply wouldn't want to live in one anyway, and they come with the risk of high service charges whenever you're asked to pay your share of the social landlord's refurbishment or repair schemes. Particularly post-Grenfell I think everyone is twitchy about what might come out of that, even if it's just having to upgrade fire safety measures.

    And it's not RTB purchases not appearing on the registers which is the problem, it's the fact there have been no sales on the open market. If there had been (and those demonstrated higher prices) then the surveyors would have some evidence to go on, but in the absence of any comparable sales they're inevitably going to be cautious.
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