Zero valuation by mortgage valuer

violet_toad

Hi there, 

We're (hopefully) buying a 2 bed first floor ex-council flat in London. It's in a small (3 floors) block in a quiet residential area (mostly detached/semi detached housing)

Our mortgage has been declined by a small building society as the valuer said the property is not saleable and is valued as 0 as it is part of a housing estate with low private ownership - from our own searches with our mortgage broker the block and postcode area is about 50% private, which is the average across surrounding areas too. 

There are no other issues with the property or with us as mortgage applicants - the decision is based solely on local authority housing still being in the area. 

We're wondering if we would have more luck with a bigger provider who has more experience of urban areas? Or if anyone has any other advice. We are working with a mortgage broker who is very surprised by this result as the lender was happy with ex-council flats in general. 

Thanks! 

K_S

@violet_toad Furness/Principality? 

Generally speaking, other than huge tower blocks, in most instances I've never had an issue placing ex-council flats in London with mainstream lenders.

Is there any particular reason that you went with a small BS, generally speaking they're more conservative than mainstream lenders when it comes to the security property.

Unless there are other complicating factors in the background which limits the breadth of lenders you can access, hopefully your broker should be able to place you with another lender.

violet_toad said:

Hi there, 

We're (hopefully) buying a 2 bed first floor ex-council flat in London. It's in a small (3 floors) block in a quiet residential area (mostly detached/semi detached housing)

Our mortgage has been declined by a small building society as the valuer said the property is not saleable and is valued as 0 as it is part of a housing estate with low private ownership - from our own searches with our mortgage broker the block and postcode area is about 50% private, which is the average across surrounding areas too. 

There are no other issues with the property or with us as mortgage applicants - the decision is based solely on local authority housing still being in the area. 

We're wondering if we would have more luck with a bigger provider who has more experience of urban areas? Or if anyone has any other advice. We are working with a mortgage broker who is very surprised by this result as the lender was happy with ex-council flats in general. 

Thanks! 

violet_toad

Thanks so much @K_S - yes it was Furness. We went with them on the advice of our broker. 

That's reassuring to know and we will re-apply with a big lender. It doesn't seem like there are other complicating factors, and we've now heard from EA that others have had no problems with valuation surveys recently for the same flats.

However, the surveyor came from a big company used quite a lot by the estate agent, so it's made us quite nervous that the same zero value result could come back again! 

K_S

violet_toad said:

Thanks so much @K_S - yes it was Furness. We went with them on the advice of our broker. 

That's reassuring to know and we will re-apply with a big lender. It doesn't seem like there are other complicating factors, and we've now heard from EA that others have had no problems with valuation surveys recently for the same flats.

However, the surveyor came from a big company used quite a lot by the estate agent, so it's made us quite nervous that the same zero value result could come back again! 

@violet_toad I don't mean to second guess your broker but if it's one of the volume ones, it would be good to ask them to make sure that they speak to the BDM, try and speak to their valuer (eg: Nationwide will allow the broker to get a formal 'pre-val' on the property before the application, other lenders will allow you to speak to their surveyor panel, etc.), etc. before recommending a new lender.

Lenders will always say "subject to valuer's opinion" but there are still ways to get as much assurance as one can before recommending one lender over the other.

Good luck!

violet_toad

@K_S Thanks so much - we're with a totally independent broker but I will pass this on. 

The building society had told us they were confident in the flat in principle. The surveying company was one the EA trusted and recommended. Not sure if it was a rogue surveyor...? Everyone seems perplexed...

We've confirmed we're going to re-apply to a mainstream lender tomorrow so will keep you updated! 

violet_toad

Hi, just an update on this.

We re-applied with NatWest and their L&C valuer came back completely positively and all is fine. However, we’re having some back and forth with the underwriter and so still haven’t had an offer yet (hoping this will be resolved Monday). 

As a side note I also spoken to First Direct to check their direct to lender rates, and they won’t offer on any flats where the private ownership is lower than 75%. Just thought that might be helpful to know. 

K_S

@violet_toad Thanks for updating the thread. That's great news and hope it goes to offer soon!

Ps: I assume you mean L&G Surveyor panel which is who NatWest instruct for property valuations

violet_toad said:

Hi, just an update on this.

We re-applied with NatWest and their L&C valuer came back completely positively and all is fine. However, we’re having some back and forth with the underwriter and so still haven’t had an offer yet (hoping this will be resolved Monday). 

violet_toad

We finally received our mortgage offer from Natwest! Phew! Bit of a slog but relieved to have got there. 

And yes @K_S - it was L&G Surveyor Panel  Looks like you were right all along that the smaller Building Societies are much more reluctant to lend on these kinds of properties - even when they say they lend on ex-Local Authority!

Now hoping for a smooth rest of the buying process (fingers crossed!)