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Massive down-valuation on a new build

Atreyu107
Atreyu107 Posts: 96 Forumite
in House buying, renting & selling
Hi all,

I'm going through the process of buying my first home through shared ownership. It's a new-build flat being sold by a housing association, and my purchase share is 25% on a total value of £550,000. .

Everything thing was going smoothly up until yesterday. My mortgage advisor has found a great mortgage, my credit and ID checks were all accepted by the mortgage company and everything was looking good.

Then the bank sent round the surveyor...

The valuation report back today values the property at £475,000, a full £75,000 below the asking price.

My mortgage advisor is in discussion with the Housing Association to understand what's gone wrong, but I'm trying to get my head around how the two figures can be so different.

The block I'm buying in is all shared ownership, so I know for a fact that there are no cash buyers stumping up the difference. It's also not like I'm the first buyer in the block... In fact, out of the 20 flats available, the flat I'm purchasing is one of the last three to complete.

Other than getting another valuation done with another lender (and therefore a worse mortgage deal) is there any recourse for me challenging this valuation with the surveyor?

This is now the second time a Chartered Surveyor has royally done me over on a house purchase, and the lack of accountability is astonishing.

Thanks all,
A
I work in the financial services industry but I am not a financial adviser. I do not give financial advice. Anything I say here is for discussion purposes only and should not be construed as advice.
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Comments

  • SmashedAvacado
    SmashedAvacado Posts: 1,262 Forumite
    First Post First Anniversary
    Is there a chance that it is actually worth 475 and not 550?
  • theartfullodger
    theartfullodger Posts: 14,597 Forumite
    Name Dropper First Anniversary First Post
    It's worth the valuers view
  • kingstreet
    kingstreet Posts: 38,764 Forumite
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    What are the comparables like?

    That's recent (last four months) SOLD prices of similar property in the vicinity (0.5 miles or less) as that is the data the surveyor is expected to rely on.

    Could/did the HA supply completion statements if the data isn't yet on the Land Registry data?

    Some lenders also instruct surveyors to value newbuilds on a non-newbuild basis. Has that happened here?
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • Atreyu107
    Atreyu107 Posts: 96 Forumite
    Nothing on the land registry yet. The block I'm buying in was completed in August. The block next door completes in October.

    I'll wait to hear what the mortgage advisor gets back from the HA, including whether they provided completion statements.

    I'll also ask him if he can find out on what basis the lender instructed the valuation.

    Thanks for you suggestions.
    I work in the financial services industry but I am not a financial adviser. I do not give financial advice. Anything I say here is for discussion purposes only and should not be construed as advice.
  • Atreyu107
    Atreyu107 Posts: 96 Forumite
    SmashedAvacado wrote: »
    Is there a chance that it is actually worth 475 and not 550?
    theartfullodger wrote: »
    It's worth the valuers view

    It's entirely possible, but I would have thought highly unlikely given the reasons I listed:
    -These are SO flats, meaning that the people buying them generally don't have a lot of spare cash to make up the difference in down-valuations
    - They are SO flats, so that CANNOT be paid for in cash. If someone had that much cash, they'd break the upper affordability threshold
    - I am not the first person buying a place, so there should be comparables for those that have completed in the block which are identical to mine
    I work in the financial services industry but I am not a financial adviser. I do not give financial advice. Anything I say here is for discussion purposes only and should not be construed as advice.
  • ProDave
    ProDave Posts: 3,721 Forumite
    First Anniversary Name Dropper Combo Breaker First Post
    At the risk of over simplifying it, have you discussed this with the HA and suggest to them it is only worth £475K and you will proceed and buy a 25% share for ££118,750

    If buying a normal house and the valuation comes in low, it is normal to go back tot he vendor and re negotiate the sale price.
  • SmashedAvacado
    SmashedAvacado Posts: 1,262 Forumite
    First Post First Anniversary
    Its not about when those buyers completed, their pricing reflects the market value when they exchanged. In a new block when properties have been sold off plan there is often a paper fall in "value" around completion.
  • theartfullodger
    theartfullodger Posts: 14,597 Forumite
    Name Dropper First Anniversary First Post
    Atreyu107 wrote: »
    It's entirely possible, but I would have thought highly unlikely given the reasons I listed:
    -These are SO flats, meaning that the people buying them generally don't have a lot of spare cash to make up the difference in down-valuations...........
    I've long been of the view that the shared ownership schemes/scams have had "optimistic" pricing, higher than comparable open market stuff.


    Well, they would, wouldn't they. Just because it's a HA doesn't mean they're not greedy for their bonuses & high salaries...
  • Atreyu107
    Atreyu107 Posts: 96 Forumite
    theartfullodger wrote: »
    I've long been of the view that the shared ownership schemes/scams have had "optimistic" pricing, higher than comparable open market stuff.


    Well, they would, wouldn't they. Just because it's a HA doesn't mean they're not greedy for their bonuses & high salaries...

    Thank you, snide cynicism is exactly why I come to the MSE forums...

    What you are continuing to ignore (presumably because it undermines your world-view) is that being greedy and opportunistic is all good and well when you're dealing with people who are flush with cash.

    It doesn't work as well when the person you're trying to screw out of a few extra bob doesn't have a few extra bob to be screwed out of in the first place.
    I work in the financial services industry but I am not a financial adviser. I do not give financial advice. Anything I say here is for discussion purposes only and should not be construed as advice.
  • Pixie5740
    Pixie5740 Posts: 14,515 Forumite
    Name Dropper First Post Photogenic First Anniversary
    How has this Chartered Surveyor or any other Chartered Surveyor royally screwed you over?
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