Trying to sell our house but keep getting zero valuation - what do we do?!

_MrBojangles_

Hi all,

This is a bit of a complicated situation but I'll try and keep it as brief as possible. 

We bought a leasehold maisonette in 2019, we are the sole occupants in the building, and below our maisonette is an empty void with an active transformer/substation. The lease is with the local council, and they also lease the transformer chamber (as they call it) to UK Power Networks. 

We bought the house with around a 40% deposit, and obtained a mortgage from Natwest for the remaining amount. We remortgaged in 2021, again with Natwest. 

We've been trying to sell our house for the last 6 months but have lost 1 buyer because both mortgages they applied for were rejected as our house was zero valued (presumably because of the transformer/substation). Bizarrely, one of the lenders who valued our house at zero was Natwest, who clearly didn't zero value the house when we bought it with a mortgage from them!

The second (current) buyer used a more specialist lender but they've also just been rejected (it's currently going through an appeal, but we're not holding out any hope) with another zero valuation on our house. 

We're starting to despair now as we have already found and had an offer accepted on our dream house, which we can now feel slipping through our fingers. 

Our estate agent mentioned that if Natwest are valuing the house at zero then their initial valuation when we applied for the mortgage may have been incorrect. Is this possible, and if so does that give us an avenue for holding them liable for allowing us to get a mortgage on a house with no resellable value?

If anyone has any advice on what we can do or what options we might have that'd be much appreciated as we are 2 months from the birth of our first child and things are rather stressful here at the moment, to put it lightly!

Many thanks

lincroft1710

Just because NW agreed to a mortgage on a property at some time in the past, does not make them liable to agree to a mortgage with the same or different borrower on the same property at a future date.


Lenders' criteria change as does the saleability of a property. 

user1977

_MrBojangles_ said:

Our estate agent mentioned that if Natwest are valuing the house at zero then their initial valuation when we applied for the mortgage may have been incorrect. Is this possible, and if so does that give us an avenue for holding them liable for allowing us to get a mortgage on a house with no resellable value?

No. Lenders are entitled to change their lending criteria whenever they like. And their valuation was for them, not you. If you had got your own survey (did you?) which didn't mention that the substation might be an issue, then potentially you might have a claim against your surveyor.

And your property doesn't have "no resellable value", it's just difficult to mortgage. Have you considered clearly marketing it only to cash buyers?

_MrBojangles_

user1977 said:

No. Lenders are entitled to change their lending criteria whenever they like. And their valuation was for them, not you. If you had got your own survey (did you?) which didn't mention that the substation might be an issue, then potentially you might have a claim against your surveyor.

And your property doesn't have "no resellable value", it's just difficult to mortgage. Have you considered clearly marketing it only to cash buyers?

We did get a full survey, I'll dig it out and check. We were very worried about the substation initially but the fact we got a high street mortgage on it made us feel that it would be easy to sell in future as well (silly us!)

Yes we have considered cash only, but the much reduced asking price would almost certainly mean we lose the dream house. 

Thanks both for your answers. So presumably it is up to our buyer's broker to find a potential lender, would there be anything to gain by phoning around specialist lenders myself?

ReadingTim

Banks and building societies can and do change their lending criteria from time to time, so it could be that whilst they were happy to lend against the property in the good times, they're not so willing now prices aren't rising.  So I don't think you've got any recourse there I'm afraid.  And whilst they could have made a mistake once, making the same one twice seems a little far-fetched

Furthermore, the place doesn't have "no resellable value", it just can't be purchased with a mortgage, so you're going to have to market it to cash buyers only.  

Sarah1Mitty2

_MrBojangles_ said:

user1977 said:

No. Lenders are entitled to change their lending criteria whenever they like. And their valuation was for them, not you. If you had got your own survey (did you?) which didn't mention that the substation might be an issue, then potentially you might have a claim against your surveyor.

And your property doesn't have "no resellable value", it's just difficult to mortgage. Have you considered clearly marketing it only to cash buyers?

We did get a full survey, I'll dig it out and check. We were very worried about the substation initially but the fact we got a high street mortgage on it made us feel that it would be easy to sell in future as well (silly us!)

Yes we have considered cash only, but the much reduced asking price would almost certainly mean we lose the dream house. 

Thanks both for your answers. So presumably it is up to our buyer's broker to find a potential lender, would there be anything to gain by phoning around specialist lenders myself?

Could you borrow money from friends/family or another bank to make up the difference?

youth_leader

My house was also valued at £0 because the lender wanted a damp/timber survey.  Has it been confirmed it is the substation?

housebuyer219

I feel your pain. We lost two buyers and our “dream home” as we are a flat above commercial premises and both FTBs couldn’t get a mortgage, again ironically they applied with for a mortgage with the same mortgage company I have and got rejected. 

We have now had to reduce our asking price in the hope it attracts a cash buyer and we can get on with getting out  

_MrBojangles_

user1977 said:

_MrBojangles_ said:

Our estate agent mentioned that if Natwest are valuing the house at zero then their initial valuation when we applied for the mortgage may have been incorrect. Is this possible, and if so does that give us an avenue for holding them liable for allowing us to get a mortgage on a house with no resellable value?

No. Lenders are entitled to change their lending criteria whenever they like. And their valuation was for them, not you. If you had got your own survey (did you?) which didn't mention that the substation might be an issue, then potentially you might have a claim against your surveyor.

And your property doesn't have "no resellable value", it's just difficult to mortgage. Have you considered clearly marketing it only to cash buyers?

I found our original survey, the only references it makes to the substation are as follows:

there are electrical substations to the underside of the property, therefore, further information needs to be obtained with the lender as it may affect the valuation. More details on the risk implication within this report under a subheading (land use-hazard).

Followed by this later on:

There are electrical substations to the underside of the property, substation gives electromagnetic radiation (EMR) which create an electromagnetic field (EMF) this EMF can go through bricks, concrete and human body which is a health risk, people who live close by have the right of concern and we do recommend to obtain EMF survey report on extent of the risk.So they make a reference to the valuation but pass responsibility for checking this onto the lender. It was a house buyer's survey though and not a valuation survey so I'm not really sure what he was supposed to cover?

_MrBojangles_

youth_leader said:

My house was also valued at £0 because the lender wanted a damp/timber survey.  Has it been confirmed it is the substation?

We've asked for a detailed report, but it almost certainly is the substation yes. 

housebuyer219 said:

I feel your pain. We lost two buyers and our “dream home” as we are a flat above commercial premises and both FTBs couldn’t get a mortgage, again ironically they applied with for a mortgage with the same mortgage company I have and got rejected. 

We have now had to reduce our asking price in the hope it attracts a cash buyer and we can get on with getting out  

Sorry to hear you've had the same problems. It's just so frustrating as our house is clearly easy to sell - we had 8 offers all over asking price! 

user1977

_MrBojangles_ said:

user1977 said:

_MrBojangles_ said:

Our estate agent mentioned that if Natwest are valuing the house at zero then their initial valuation when we applied for the mortgage may have been incorrect. Is this possible, and if so does that give us an avenue for holding them liable for allowing us to get a mortgage on a house with no resellable value?

No. Lenders are entitled to change their lending criteria whenever they like. And their valuation was for them, not you. If you had got your own survey (did you?) which didn't mention that the substation might be an issue, then potentially you might have a claim against your surveyor.

And your property doesn't have "no resellable value", it's just difficult to mortgage. Have you considered clearly marketing it only to cash buyers?

I found our original survey, the only references it makes to the substation are as follows:

there are electrical substations to the underside of the property, therefore, further information needs to be obtained with the lender as it may affect the valuation. More details on the risk implication within this report under a subheading (land use-hazard).

Followed by this later on:

There are electrical substations to the underside of the property, substation gives electromagnetic radiation (EMR) which create an electromagnetic field (EMF) this EMF can go through bricks, concrete and human body which is a health risk, people who live close by have the right of concern and we do recommend to obtain EMF survey report on extent of the risk.

So they make a reference to the valuation but pass responsibility for checking this onto the lender. It was a house buyer's survey though and not a valuation survey so I'm not really sure what he was supposed to cover?

The comments seem fair enough - they highlighted to you that you may wish to consider a specialist survey (I guess you didn't?) and that lenders may have a concern about it (was it flagged it up with them at the time?).