New Build - Mortgage Valuation lower than purchase price!! PLEASE HELP

gooner63_2

Nashydred wrote: »

This although a pretty old post was very helpful. Thanks for updating to the end.[/QUOTE

Pretty old is an under statement.....it's ancient !!!!:D

bexyboo1312

wonder what its worth now!?

Jo_Mc_2

Nashydred wrote: »

This although a pretty old post was very helpful. Thanks for updating to the end.

It's been helpful to me too.
We've just found ourselves in this position, following a call from Nationwide with the valuation result and mortgage offer at 5.30pm this evening.

We've paid a £500 reservation fee for a new build house which was originally on the market for £229,950 when it was completed in May 2010. The asking price since then has been reduced to £209,950 and included are all floorings and turf. The adjacent identical house is showing as selling for £224,950 in July 2010 on Mouseprice.

The valuer appointed by Nationwide has valued the house at £185,000 and therefore Nationwide's mortgage offer is coming in at £12,000 less than we need. We'd applied for a mortgage that was 67% LTV.

The sales advisor warned me yesterday, when I spoke to her about another matter, that Nationwide severely undervalue so I'm not confident of the housebuilders (a large company with new developements around the country) dropping the price enough for us to proceed as they've obviously already made it clear that they're unimpressed with valuations made by Nationwide so I can't see them acting on that.

She seemed surprised that we hadn't taken the advice of the financial advisor with whom she'd arranged, in front of me, to give us a call during the week between Christmas and New Year. No call came so we looked around online but decided to stick with Nationwide as they're our current lender and have been with no problems since we bought our first property 20 years ago.

BTW, the financial advisor finally called at 4.30pm this afternoon and simply asked if we'd sorted out a mortgage which at that time we thought we had.

We'll be going to the sales office tomorrow to see if they're prepared to negotiate, typical though that this happens on the weekend so we'll have to wait it out a few stressful extra days.

Sandy1982

Hi!

This thread has been so interesting and relevant to me at this moment (despite its age), having found myself in this situation. Jo_Mc - any update?

The valuation for me has come in at £5K below the price I offered (again, we're talking about a new build by the way). I can totally see the sense in re-negotiating/being prepared to walk away, but I'm being told that its a mistake with the mode that the valuer has carried out the valuation. I understand that the valuation was outsourced by the lender to another company and apparently they used out of date prcedures (referring back to something a previous person wrote about valuing it at the 2nd hand sale price of the flat - I'm told this is no longer their method of valuing, but I could have incorrect information??). Apparently the valuation is now being appealed - but should I not just try to get a price chip??

poppysarah

Sandy1982 wrote: »

Apparently the valuation is now being appealed - but should I not just try to get a price chip??

Do a rightmove search within 1/2 mile of the postcode of the new build wihtin the price parameters.

Does nothing else take your fancy?

New builds devalue as soon as you move in. It's like a new car.
(and from the ones I've seen, they're tiny!)

Doozergirl

Yes Sany, it would be more beneficial for you to try for the price drop and a swift completion.

How much are you buying for? £5k isn't a great deal, I very much doubt the surveyor will shift such a small amount. Ultimately, it's in your interests that he doesn't!

And it's not so much that the developer couldn't move on it...

Good Luck!

Sandy1982

It's a shared equity deal, which essentially rules out anything but New Build. I agree with your point (Poppysarah) regarding devaluing etc, but in the current climate (I have that phrase) FTBs without a 25% deposit are left with few options to get on the ladder without deals like these. When I say this, I am sure there are mortgages out there for a lesser deposit, but I'd probably be crippling myself in terms of the monthly repayments. Ideally, yes I'd not be buying a new build, but we are where we are.

The options are: 1. Buy on a shared equity/ownership scheme or 2. save up for years - we're probably talking 3-5 years albeit I appreciate hopefully the market will move on and deposit requirements might drop. As it goes, I'm in a better position than some as I do have some money to put down for a deposit, but as a single purchaser it's simply not realistic that I can save such a substantial amount of money in a short space of time.

Doozergirl it's £119K, and within 1/2 a mile of the postcode, I can assure you there's is nothing else available (even considering outside the realms of shared equity/ownership - but there's absolutely none one of shared equity/ownership in the vicinity).

thanks

Flashmanchop

Sandy1982 wrote: »

It's a shared equity deal, which essentially rules out anything but New Build. I agree with your point (Poppysarah) regarding devaluing etc, but in the current climate (I have that phrase) FTBs without a 25% deposit are left with few options to get on the ladder without deals like these. When I say this, I am sure there are mortgages out there for a lesser deposit, but I'd probably be crippling myself in terms of the monthly repayments. Ideally, yes I'd not be buying a new build, but we are where we are.

The options are: 1. Buy on a shared equity/ownership scheme or 2. save up for years - we're probably talking 3-5 years albeit I appreciate hopefully the market will move on and deposit requirements might drop. As it goes, I'm in a better position than some as I do have some money to put down for a deposit, but as a single purchaser it's simply not realistic that I can save such a substantial amount of money in a short space of time.

Doozergirl it's £119K, and within 1/2 a mile of the postcode, I can assure you there's is nothing else available (even considering outside the realms of shared equity/ownership - but there's absolutely none one of shared equity/ownership in the vicinity).

thanks

But with a shred quity your paying a Mortgage, and Rent.... please ake sure you read the ahred equity small print...

Sandy1982

Ordinarily yes, but with this scheme, the Housebuilder loans you x% towards the deposit, which is a 10yr interest free loan, and that is lodged on your title as a 2nd charge. No rent payable.

brit1234

Sandy1982 wrote: »

Ordinarily yes, but with this scheme, the Housebuilder loans you x% towards the deposit, which is a 10yr interest free loan, and that is lodged on your title as a 2nd charge. No rent payable.

What happens in 10 years time when you have to pay that loan back, when the house price might be still lower than you purchased and interest rates considerably higher.

These schemes are designed to keep house price artifically high, they are not doing you any favours.

Far better to keep saving your deposit and enjoy the continual price falls. You will be far better off in the long wrong.