House devalued to £2k less than 2005 with remortgage?

martyp

Hi all,

I'm currently going through a remortgage on my 50% shared ownership property and it had a valuation done in February which was initially £150k.
That seemed fine as the house next door which was much the same except had loft conversion and conservatory was sold for £142k in 2017.
Then the mortgage broker came back saying the new lender had downvalued it to £108k which was £2k less than its value when I bought it in early 2005.
Great for the idea of purchasing the other half but worried the housing association are going to think I've trashed the place.
I haven't been able to afford to do it up much apart from new bathroom, carpet in one room, new boiler and new painting and wallpaper. I think it's in nice condition, possibly a little cluttered.
The mortgage brokers seem to insist house prices have fluctuated and a colleague at work advised they dropped massively just before Brexit was due but going up again. The housing association seems to disagree on that.
I thought there may have been a miscalculation as other similar houses in the street have sold for £70k in the last few years but that's for the 50%
The mortgage offer says my share is £70k too yet the value is £108k?
Does this sound normal at all as the mortgage broker seems to think it is?

AnotherJoe

What do the housing association say?

And where are you?

martyp

The housing association have said they haven't noticed prices dropping lately and have done a lot of voluntary right to buy.

West Midlands - according to Zoopla my house should be worth about £142k

cattie

Take absolutely no notice of Zoopla. They pluck prices from the air & generally bear no relation to the true market value whatsoever.

No mortgage lender is going to consider you've trashed the house unless you've done something drastic such as rip out the bathroom or kitchen & not replaced it.

Everybody lives differently, some like their interiors to always be up to date & completely uncluttered & change furnishings & decoration often to keep up with whatever is 'in' at the time. Some move in & are happy just to have a roof over their head & are comfortable with current decoration & furnishings & quite happy being surrounded by the various bits & pieces they've accumulated.

Is the mortgage offer £70k, only it's not too clear from your post? Or is it half the valuation of £108k? I've heard many valuations of housing association shared owership properties do not quite tally with the open market prices of similar properties.

lisyloo

Are you in a position to buy the other half?
Sounds like a great opportunity to me.

martyp

Thanks cattie, the mortgage amount is £39k, the original was £55k. The housing association asked why the value was £108k yet the value of my share at the top of the offer was £70k which doesn't add up.
The house is by all means not a show home, it's homely for me and has many possessions in it. I also have few visitors coming round and no intention of moving.

martyp

lisyloo wrote: »

Are you in a position to buy the other half?
Sounds like a great opportunity to me.

I did consider this although based on what the housing association said their valuations are coming out higher and I'd have to have another valuation done by their own surveyor and they won't accept the existing one.
My dad would help out as I wont be able to get enough on a mortgage for the other half because of my low income so hold hope for house prices to settle or even drop with all the new houses being built possibly. The new mortgage is lower interest so I'm hoping to overpay as much as I can to clear it and look at the other half.

I must admit you do seem to get penalised more by shared ownership schemes as it costs more on the legal aspect not to mention all the hassle of them being involved. If it was a straight freehold situation the remortgage would have been sorted by now probably.
I found for legal fees they charge loads more for being leasehold and more again for shared ownership and these are schemes to help people with low incomes that can't afford the full mortgage...

phillw

martyp wrote: »

I must admit you do seem to get penalised more by shared ownership schemes as it costs more on the legal aspect not to mention all the hassle of them being involved.

I'm not sure if penalized is the right word, there are added costs and inconveniences because someone else is involved. That should be outweighed by being able to buy even a share in a property when otherwise you'd be renting.

I hope the valuations are impartial.

martyp

It is definitely good actually owning some of the house over renting, just the frustration of having another party involved which in my case was difficult to communicate with as the generic customer service number and email very much never responded. I had to persevere to find a contact to help me , hoping to get things sorted now.
Also the housing association charges over £100 on too for their admin charges so it all adds about £400 I think.

Fingers crossed it's all sorted in the next couple of days...