Down Valuation

k1irk1978

We are in the process of attempting to purchase a property and have just received the valuation report from the building society which has down valued the property of £50k (purchase price £330k). We had an independent home buyers report done which said the purchase price was reasonable. I’m really not sure where we go from here. Any advice gratefully received. Thanks 

K_S

@k1irk1978 The usual options are -

- Potentially appeal the down-val, though unless you have clear comparable sales, it usually is a waste of time and effort

- proceed at the revised LTV (assuming you aren't purchasing at a high LTV). For example if you applied at 60% LTV (198k loan size on a 330k purchase), your effective LTV after a 50k downval is now 71% LTV so you could proceed on that basis. Needless to say, it's only an option if you aren't already at a high LTV.

- apply with another lender that uses a different surveyor panel. There's no guarantee that the resulting valuation will be any higher but from experience, valuation is an inexact science and two lenders can value the same property very differently, even just a week or two apart. If the second lender using a different surveyor panel down-values it as well then perhaps it's time to reconsider 

k1irk1978

@K_S thanks for the info. My broker has sent over both the Best Price Guide that the vendor received from Strike and I have also sent the Home Buyers report that we had done independently which states that the purchase price is fair under current market conditions although I am not hopeful that they will increase their valuation by as much as £50k when they review these.
We are putting down a 54% deposit but I am not comfortable purchasing at a higher LTV when the down valuation is so significant.
I think our best option is to try another lender, we had been limited as to who we could use due to my partner’s complex employment history in 2019/20 but we can now complete his tax return for 21/22 which is much more straightforward and should hopefully give us more scope. This is so stressful 

K_S

@k1irk1978 If your approach is that you don't want to pay this price for a property unless at least one lender values it around the same amount, then yes it may make sense to try with a second lender.

However, from a cost point of view, given that both LTVs (pre and post valuation, 46% LTV  and 54% LTV) are very low, the difference in rates are likely to be zero and with a new lender you are likely to be applying for a higher rate now given the recent (over the past week) mortgage rate increases across the board.

So even if you are going to apply with a new lender (that uses another surveyor panel), it may be worth proceeding to an offer from the current lender anyway and keeping it as backup.

Sarah1Mitty2

Which Building Society was that?