Large Deposit - Mortgage Down Value

newsgroupmonkey_

Sarah1Mitty2 said:

newsgroupmonkey_ said:

I've no idea where abouts in the country this is, but to put into perspective.....

We bought at £260k in Feb 2020 and sold for £330k early last year.

We did absolutely nothing to our house other than refresh the bathroom and paint it.
We removed a shed that was falling down.

Average house price in the UK in Jan 2020 was £220k. Average now is £288k.

So even if they'd done nothing, it matches the current house prices.

It matches some houses that sold a while ago but it doesn`t mean they can sell their one now, averages can be very misleading.

Of course. If they're in the Midlands, they're probably worth a lot more than that.

In the HBOS averages, they pick up by area. I get that it doesn't work down to an individual town or even street, but it's a fairly good way of understanding what's going on in the market.

I can tell you what I do know..... survey valuation values are gaining traction. But you're probably not party to that information and sadly, I'm not allowed to share it.

Sarah1Mitty2

SamuelRJ said:

Hello, 
Naive FTB's here in need of advice: 
Both my partner and I inherited money/ property which has allowed us to put £200k deposit on property. 
We found 1 we love which vendor bought only 3 years ago for £230k but wanted £295k as they have done a lot of work to the place so we agreed. The property has a few snags for mortgage lenders, including a S157 which restricts owners to those who've lived locally, but this isn't an issue for us and the council have already provided a reference saying they'll forego the S157 if house was repossessed and MA is confident based on previous properties he's worked on that this will be fine. 

Anyway, we're now at point of mortgage valuation & we think we've likely over paid what it's worth to a mortgage valuation - Zoopla puts property at £270k. We understand lenders don't like this and it can usually cause real headache for buyers but wondered if we're able to bypass considering we've only asked for £95k & the risk to lender is much less? We really can't throw any more at the deposit.

When is the valuation?

dander

Don't worry about the mortgage valuation if you are happy with the price. As others have said, it matters for the high LTV people. When I last remortgaged, the bank actually had different types of valuation they offered - a free bog-standard google search valuation for people who weren't particularly concerned and a paid-for "proper" valuation for when it really mattered!

HOWEVER.... that S157 worries me. When you say the council will forgo it, does that mean just for you or does that mean it won't apply in the future? It's purpose is to keep affordable housing for local people, so it will pull the value down. Definitely check the amount you are paying takes that into account and check the value against other similar properties that also have that limitation, not against those on a more open market.

Sarah1Mitty2

MEM62 said:

SamuelRJ said:

The property has a few snags for mortgage lenders, including a S157 which restricts owners to those who've lived locally, but this isn't an issue for us 

That might not be an issue for you now as you head is in 'moving in' mode.  It will be a big issue when  it restricts your market when selling.    

Good point.

Sarah1Mitty2

dander said:

Don't worry about the mortgage valuation if you are happy with the price. As others have said, it matters for the high LTV people. When I last remortgaged, the bank actually had different types of valuation they offered - a free bog-standard google search valuation for people who weren't particularly concerned and a paid-for "proper" valuation for when it really mattered!

HOWEVER.... that S157 worries me. When you say the council will forgo it, does that mean just for you or does that mean it won't apply in the future? It's purpose is to keep affordable housing for local people, so it will pull the value down. Definitely check the amount you are paying takes that into account and check the value against other similar properties that also have that limitation, not against those on a more open market.

Valuation matters a LOT more now than it used to.