Nationwide valuation for rate switch - massive difference, how do they work it out?

newbieFTB

I took out a 5 year fix in August 2017 at 3.19% with Nationwide as a FTB (hence username!). I'm considering a rate switch, paying the ERC, to fix again at a lower rate while house prices are still high and rates are still low.

The house was valued at 300k but it's a shared ownership so my share was 30% ie 90k. I know shared ownership is a dirty word on these forums but where I live (South East) the market is, and always has been, insane for SO properties. If you didn't ring up within minutes of the Rightmove ad you wouldn't get a viewing and many houses had a mythical 'premium' added ie 10/15/20k for supposed improvements (that didn't exist) that couldn't be added to the mortgage and had to be paid to the vendor. Just setting the scene for WHY my house is overpriced! That said, to me it is definitely worth what I paid as it's a lovely house in a great area and costs way less than the rent on a 1 bed flat in a grotty area so the actual house price was fairly irrelavent as long as I could get the mortgage approved at the valuation and afford the repayments.

According to the Nationwide House price calculator a property valued at 300k in Q2 of 2017 is now worth £349,353 in Q3 of 2021 - an increase of 16.45%

I went on the Nationwide site and there is an option to get a property value estimate for a rate switch when you enter your mortgage account number. That estimate came back at £279,559 - a decrease of 20.4k (6.8%) in the last 4 years. This is clearly not reflective of the market but in fairness is probably a fairly accurate valuation of my house, knowing that it was overpriced at the point of purchase.

Now Nationwide themselves accepted a valuation of 300k in Q2 of 2017 and according to their HPC the market has risen 16%. Does anyone know what would happen if I put this higher figure in for the valuation on the application, would they automatically downgrade it to the system generated one or maybe even value it in person?

It makes a huge difference for the LTV - if I go by the house price calc valuation the LTV is 70.32% whereas the system generated valuation is an LTV of 87.9% - with an LTV of 70.32% I can carry on paying the same amount and knock 5 years off the term!

Would be grateful for any input