Barclays - ESurve Nil Valuation - Mortgage outside of lenders policy

elizabethpecsi

I'm in the process of buying a new build property.  I recently was approved for my mortgage by Barclays on 25th October, I received the offer in writing from Barclays after the valuation had been completed by Esurv on 30th September, and the valuation report was approved on 20th October. 

My solicitor has been chasing Barclays as there was a nil valuation showing on the valuation report. 

I was set to complete last week, I've sent the deposit funds to my solicitor, however my solicitor contacted me to say that Barclays had been in touch to inform them:

The property fell outside of the banks lending policy due to the nature of the  adjacent commercial unit, to a retail shop, offices, a dry cleaners and a takeaway. The use of the commercial element falls outside the lending policy. That's why a valuation could not be provided. 

The developer has let me know that Barclays have lent and completed on three other properties, and Esurv have completed 90% of the valuation reports and they haven't had any issues. 

I have contested this with Barclays, who have reviewed their lenders policy and agreed they are also confused by this response, as the lenders policy doesn't reference being 'adjacent' to shops. Barclays have let me know they will contest this with Esurv however the decision lies in Esurv hand and if they do not update the valuation report, they will not lend me my mortgage. 

Reading Esurv reviews online it seems they are notorious for poor valuations, and many others are in this situation.

As I secured my mortgage with Barclays at 3.14%, and rates have increased, if I was to re-apply for a mortgage my interest rate would be higher. 

I'm looking for any advice of anyone who has been in a similar situation, or familiar with how I can contest the surveyors valuation, as Barclays have leant to other people in the development.  This is a extremely confusing situation to be in, as my mortgage was offer was issue in writing after the valuation report was completed in October, however 22nd November Barclays have informed me this is outside of their lending policy.

I'm concerned as if Esurv do not update their valuation report, I will have no choice but to re apply for a mortgage at a higher rate. 

Any help would be appreciated! 

propertyrental

The decision to lend, and the policies on which they will or will not lend, is surely Barclays? Eserve (or any surveyor) will simply provide a valuation and that should take account of Barclay's policies.

It's not uncommon for a lender to have a policy not to lend on properties above, adjacent to, and/or near commercial premises (makes them harder to sell on following repossession).

However if B clarify their policy to eserve I would expect eserve to re-value based on the policy.

JMA74

people that leave reviews on surveyors tend to be people who have had bad outcomes.  You wont hear of the hundreds of thousands of valuations that get done with no issues. 

Seems a really odd situation though as the mortgage offer should never have been issued if the valuation had been returned as nil.   

Do you have a broker who can escalate this for you? 

caprikid1

"Reading Esurv reviews online it seems they are notorious for poor valuations, and many others are in this situation."

As above, Esurv came in and did a valuation exactly what I was expecting..... you just won't hear it.

Esurv valued the property exactly at the market rate (below what my wife wanted to pay due to latest kitchen) allowing me to renegotiate down.....

eddddy

elizabethpecsi said:

I'm looking for any advice of anyone who has been in a similar situation, or familiar with how I can contest the surveyors valuation, as Barclays have leant to other people in the development.  

TBH, valuers very rarely (if ever) change their opinions or valuations in these circumstances - due to professional pride and business reasons.

Essentially, it would involve the valuer saying to Barclays "Oops - I made a mistake. The house isn't actually too close to commercial premises, and it isn't worth £nil."

And then Barclays thinking "So how many other properties have you made mistakes valuing? Have your other mistakes resulted in us lending on unsuitable properties?"

If you decide to try another lender, you should look for one who doesn't use esurv for their valuations (as an esurv valuer will probably check their database of previous valuations, and quote the same £nil value.)


But the key question is... why did Barclays make a full formal offer, and then withdraw it? (If that's what happened.)

user1977

Sounds a bit odd - are you sure Barclays hadn't already overruled the surveyor's comments (because they know what their policy actually is) which is why they had decided to issue the offer? Does the mortgage offer actually say it's conditional on there being an updated satisfactory valuation? Or just your solicitor picking up on the nil value contained in the valuation?

elizabethpecsi

eddddy said:

elizabethpecsi said:

I'm looking for any advice of anyone who has been in a similar situation, or familiar with how I can contest the surveyors valuation, as Barclays have leant to other people in the development.  

TBH, valuers very rarely (if ever) change their opinions or valuations in these circumstances - due to professional pride and business reasons.

Essentially, it would involve the valuer saying to Barclays "Oops - I made a mistake. The house isn't actually too close to commercial premises, and it isn't worth £nil."

And then Barclays thinking "So how many other properties have you made mistakes valuing? Have your other mistakes resulted in us lending on unsuitable properties?"

If you decide to try another lender, you should look for one who doesn't use esurv for their valuations (as an esurv valuer will probably check their database of previous valuations, and quote the same £nil value.)


But the key question is... why did Barclays make a full formal offer, and then withdraw it? (If that's what happened.)

Thank you for this and appreciate your response - What is odd is Esurv (The surveyors) have completed multiple valuations on the development and these have completed, so odd that this is the response from my valuation.

Barclays have escalated this with ESurv, and my mortgage broker also has escalated this with Barclays and asked for this to be reviewed. 

However I am nervous as the ultimate decision is down to Esurv, and even though they have provided other successful valuations on the same development if they do not update my valuation, I will need to find a new mortgage. 

Barclays have made a full offer, and this hasn't yet been withdrawn, but if the valuation report isn't updated this will be withdrawn.

The development also is a stand alone building that has it's own entrance / exit and isn't attached / over the shops that are being referenced. 

elizabethpecsi

JMA74 said:

people that leave reviews on surveyors tend to be people who have had bad outcomes.  You wont hear of the hundreds of thousands of valuations that get done with no issues. 

Seems a really odd situation though as the mortgage offer should never have been issued if the valuation had been returned as nil.   

Do you have a broker who can escalate this for you? 

Thanks for your response - I do have a broker, who has escalated this to Barclays for the valuation to be reviewed. 

I'm also confused as to why the offer was issued, when this was the comment from the valuation. 

Fingers crossed Esurv will update the valuation this week, if not I will have no choice but to get another mortgage offer, but I am concerned as multiple banks use Esurv as their surveyors. 

elizabethpecsi

user1977 said:

Sounds a bit odd - are you sure Barclays hadn't already overruled the surveyor's comments (because they know what their policy actually is) which is why they had decided to issue the offer? Does the mortgage offer actually say it's conditional on there being an updated satisfactory valuation? Or just your solicitor picking up on the nil value contained in the valuation?

Thanks for your response - The offer from mortgage was a full offer, and had no mention of the valuation being required to be updated / reviewed. 

My solicitor was chasing the valuation as it had a nil value, however the solicitor / myself hadn't received a copy of the valuation report, only when we received this was the comment regarding being outside of the lenders policy noticed. 

It's very confusing, as even the people at Barclays have let me know a mortgage offer will never be issued, if there is any issues with the valuation report. 

elizabethpecsi

propertyrental said:

The decision to lend, and the policies on which they will or will not lend, is surely Barclays? Eserve (or any surveyor) will simply provide a valuation and that should take account of Barclay's policies.

It's not uncommon for a lender to have a policy not to lend on properties above, adjacent to, and/or near commercial premises (makes them harder to sell on following repossession).

However if B clarify their policy to eserve I would expect eserve to re-value based on the policy.

Thank you for your response - 

Barclays have escalated this to Esurv, so hopefully they will review this as they have referenced their policy so fingers crossed this will be updated. 

It's just very odd as it's a development of flats and other buyers have completed and Esurv completed their valuations.