Skipton valuation on new build

FinanceNovice91

My partner and I are reserving a new build and I want to port my mortgage from Skipton over as it makes most financial sense (I’ll face 3% fees if I don’t). 

Affordability wise we’re fine for the mortgage (90% of a £233k mortgage) but today we’ve found out that Skipton have valued the new build at £220k instead of £233k. My mortgage broker tells me not to start panicking yet but I can’t help it. We’re due to complete mid-May (this was a last minute reservation as someone else pulled out) and we’ve accepted an offer on my flat, with no-where to go if our new build falls through. 

The builder has been helpful and sent over comparable details today, but I’m concerned that this is going to cost me if they ask me to get a second mortgage application which could ultimately leave me paying exit fees, or if we need to pull out of the sale and face estate agent fees and solicitors. 

Is there anything I can be doing or is it just a waiting game? Is a down valuation of £13k something to be worried about? Is it likely the builder would lower the price by £13k if the second mortgage offer devalued to the same? 

Thanks for any reassurances / advice that can be given. 

Slithery

Do you have an extra £13k in savings you can put towards the new property?

FinanceNovice91

Slithery said:

Do you have an extra £13k in savings you can put towards the new property?

No, unfortunately not - and I wouldn’t want to be trapped in a situation where I paid that much over the valuation from savings. 

lookstraightahead

FinanceNovice91 said:

Slithery said:

Do you have an extra £13k in savings you can put towards the new property?

No, unfortunately not - and I wouldn’t want to be trapped in a situation where I paid that much over the valuation from savings. 

That's what the bank will be thinking as well unfortunately, how about the builder reducing the price is that an option? 

K_S

@FinanceNovice91 Has the down-valuation been appealed against? 

Valuations aren't an exact science and there's a lot of subjectivity involved. The next lender you try (ideally one that uses a different surveyor panel) might well value it at the purchase price. 

If you still want to proceed, assuming this is a house and not a flat, if the affordability+criteria stack up, you could consider using a 95% LTV product (Skipton being one of the few lenders that offer 95% LTV on new-build houses) in which case you only need a 24k deposit (5% of 220k plus 13k downval), only a bit more than the deposit you currently have.

Alternatively, as you said you could apply with a different lender (ideally one that uses a different surveyor panel) and hope that comes back at a higher value so you can stick to 90% LTV.

Thrugelmir

FinanceNovice91 said:

we’ve accepted an offer on my flat, with no-where to go if our new build falls through. 

The status quo continues until you've built further savings or equity. The reason for the lower valuation on the new build is that the lender places little to no value on the extras that you are buying embeded into the purchase price. 

FinanceNovice91

We heard back today and our appeal has been successful. Wanted to provide an update to reassure any future searchers that it is possible - all I can really find online is the bad stuf, and that very rarely appeals work, so hope this gives hope to someone in the future!