Nationwide Major Down Valuation

Jinglish

Hi all; I’ll try and keep this short and to the point.

Rural village location. Offer accepted on a house move for £475k asking price. Porting current Nationwide mortgage plus additional lending at a really good rate however.... Nationwide has down valued the property at £410k which is just wrong, a 10-15k can be expected but not 65k! The issue I have is that nobody actually went round to the property they did an AVM. I’m unable to challenge it because there are no similar properties sold within the last 6 months (This house was last sold over 16 years ago). They will not offer me a copy of the valuation report nor will they send someone round there to do a proper valuation despite me saying I would happily pay for it. I need them to do an in person valuation as the property is considerable more valuable than their computer model says, it’s has so much additional work which adds to the value and I know a real valuation would be much higher. I would accept a result of an in person valuator but I know their AVM is inaccurate.

Is there anyway I can force them to do an in person valuation?

Please note:

>I can’t switch to another provider because the rates are now so much higher it would mean an extra £400 a month + about £5k in early exit fees.

>Without a valuation report I can’t go back to the seller and renegotiate.

>No point paying for an independent home buyers reports as any bank would not be interested even if I used the same company they use.

>I know for a fact there were two other full asking price offers on the table and the vendor choose ours because we were already in the village.

>I don’t mind overpaying a bit as it will be our forever home and will be there for at least 30 years but I know the AVM valuation is inaccurate. If they came back with like £460k then fair enough I know I would be overpaying £15k

Thanks in Advance

K_S

Jinglish said:

Hi all; I’ll try and keep this short and to the point.

Rural village location. Offer accepted on a house move for £475k asking price. Porting current Nationwide mortgage plus additional lending at a really good rate however.... Nationwide has down valued the property at £410k which is just wrong, a 10-15k can be expected but not 65k! The issue I have is that nobody actually went round to the property they did an AVM. I’m unable to challenge it because there are no similar properties sold within the last 6 months (This house was last sold over 16 years ago). They will not offer me a copy of the valuation report nor will they send someone round there to do a proper valuation despite me saying I would happily pay for it. I need them to do an in person valuation as the property is considerable more valuable than their computer model says, it’s has so much additional work which adds to the value and I know a real valuation would be much higher. I would accept a result of an in person valuator but I know their AVM is inaccurate.

Is there anyway I can force them to do an in person valuation?

Please note:

>I can’t switch to another provider because the rates are now so much higher it would mean an extra £400 a month + about £5k in early exit fees.

>Without a valuation report I can’t go back to the seller and renegotiate.

>No point paying for an independent home buyers reports as any bank would not be interested even if I used the same company they use.

>I know for a fact there were two other full asking price offers on the table and the vendor choose ours because we were already in the village.

>I don’t mind overpaying a bit as it will be our forever home and will be there for at least 30 years but I know the AVM valuation is inaccurate. If they came back with like £460k then fair enough I know I would be overpaying £15k

Thanks in Advance

@jinglish I've never had the exact same situation with a Nationwide porting client, but if you are using a broker for the porting it may be worth them speaking to their BDM and seeing what can be done.

Tbh, from a lender valuation point of view, it's only likely to fly if the additional work you are referring to includes an increase in the liveable floor space (eg: rear/side extension, loft conversion, etc.) rather than internal cosmetic improvements such as modernised interiors, new kitchen/bathrooms, etc. 

What was your original loan size? Does the down-valuation actually stop you from going ahead?

Jinglish

Hello,

Yes I am using a broker and they have never had a down valuation this much before. Hope they have some tricks up their sleeve. Will find out next week.

60% LTV, I don’t have the backup funds to proceed at £410k valuation but I have an extra £30k I could throw at it but that’s all.

The extra work is a large conserverty, garden room, entrance hall, and garage lean too. Adding an extra 15m2 of space when you compare this properties EPC vs the original.

The untouched version of this house two doors up completed for £410k in Sept 2021. So a year later plus all the extras this property has I feel they are about £40k-50k out.

like I say I would accept an in person valuation.

K_S

Jinglish said:

Hello,

Yes I am using a broker and they have never had a down valuation this much before. Hope they have some tricks up their sleeve. Will find out next week.

60% LTV, I don’t have the backup funds to proceed at £410k valuation but I have an extra £30k I could throw at it but that’s all.

The extra work is a large conserverty, garden room, entrance hall, and garage lean too. Adding an extra 15m2 of space when you compare this properties EPC vs the original.

The untouched version of this house two doors up completed for £410k in Sept 2021. So a year later plus all the extras this property has I feel they are about £40k-50k out.

like I say I would accept an in person valuation.

@jinglish I don't know if I'm missing something obvious here but I don't see how the down-val is stopping you from buying or the point of insisting on a new valuation unless it's to renegotiate the price downwards if it's again down-valued. Even in that scenario, you're not going to get a valuation report.

Initial application - purchase price 475k, expected lender valuation 475k, loan size (approx.) 285k, LTV 60%

After down-val - purchase price 475k, lender valuation 410k, loan size is unchanged at 285k, LTV 70%

Deposit before and after is unchanged at 190k (475k purchase price minus loan size of 285k). You don't need to add any cash.

You will need to change products from 60% LTV to 75% LTV, but as the change in band is due to a down-valuation, Nationwide should allow the broker to pick the 75% LTV product that existed back when you first applied. And off of the top of my head the difference in rates for Nationwide 60% and 75% LTV products across most fixed-terms is zero or minor at present so you are unlikely to be much worse off.

Jinglish

Thanks for that very useful. Maybe I miss understood what the brooker told me. I’m happy to pay the £475k I don’t need it as a bargaining tool I just thought I would have to find the cash difference myself. I’ll speak to my broker next week as changing products LTV I have no issue with as long as I can go ahead without pumping in extra cash now, yes my repayments will go up a tiny bit but I’m not bothered about that.

Jinglish

Confirmed with brooker today and I’m still good to proceed at 70% LTV. The higher interest rate is only for the additional borrowing as the ported part will stay at my low fixed original rate. They wanted to make sure that I wasn’t overpaying but since I disagree with the valuation it doesn’t matter. I think I got the wrong end of the stick as when I googled “under valuation” the answers were assuming I was already at 85% LTV which would mean I would have to find the extra money. Luckily i’m not. Thanks for your help and clarity.