Advice - crazy valuation (Countrywide)

BlueHorseShoe · 10 July 2018 at 12:24AM

Funny one. In November 2016 we bought a very nice property in Greenwich, London. We paid £1.15MM for the property and were actually quite pleased with the price we paid. The vendor would have priced the property higher, but needed to complete quickly to fund a pending purchase and was concerned about the pace of sales following Brexit, and in fact we would have paid more than the asking price.

At the time Countrywide did the survey and also valued the property at £1.15MM. Now that we are coming up to remortgage, countrywide have come back and valued the property at £900K - around 23% below the purchase price. Nothing has changed about the property or the surrounding area, online valuation tools (Zoopla) estimate the value of the property at or above what we paid for it, and the only comparable properties currently listed on Rightmove are on at around £1.5MM. A Google of news stories suggests that, although London is down slightly overall, prices in Greenwich have actually risen slightly during 2018, as investment continues ti flood into the area. There is certainly nothing to suggest a >20% drop in local prices.

We aren’t really sure what to do. It seems crazy for Countrywide to value the property at one level and then a short time after we purchase drop their valuation dramatically, but unfortunately they seem to act for most of the better lenders. Suggestions would be appreciated.

Xplosivgas · 10 July 2018 at 12:32AM

Was it an online/drive by valuation, or did someone inspect your house? If the former you can usually pay a fee to have someone come round to carry out a re-valuation. I did that when I was just outside a more preferable LTV %, and it did the trick.

BlueHorseShoe · 10 July 2018 at 12:44AM

It was a physical inspection. The guy said he had in fact already done a valuation on the property once before, so presumably it was actually the same guy who valued it when we bought it.

Gwendo40 · 10 July 2018 at 6:46AM

There's a lot gone on to effect the London property market in the last 2 years.

Given what's happened to the Countrywide share price in the time between your two valuations perhaps they've realised that they can't keep indulging in fantasy figures and relying on rampant, policy driven, house price inflation forever and ever and they're getting more realistic with their valuations?
Perhaps they've realised that there simply aren't enough gullible mugs and money launderers out there to keep on paying these insane prices?

mortgageFTB · 10 July 2018 at 6:52AM

What is the property? Terraced house, how many bedrooms etc?

Higher end London market is definitely cooling, so I wouldn!!!8217;t be surprised.

csgohan4 · 10 July 2018 at 7:13AM

prices go down as well as up on property, that is risk we all took when we buy

silvercar · 10 July 2018 at 7:57AM

Re-mortgage to someone that just does a drive by or even a paper revaluation.

Do you require a large LTV or are increasing the mortgage by a lot? Otherwise I can't see why the lender is making a big deal of it.

davidmcn · 10 July 2018 at 8:15AM

BlueHorseShoe wrote: »

the only comparable properties currently listed on Rightmove are on at around £1.5MM

The meaningful comparables (and the ones the surveyors will be looking at) are completed sales, not those currently on the market. Have you checked completed sale prices?

BHS79 · 10 July 2018 at 9:50PM

Hi there. Thanks for the replies (for some reason MSE has locked me out of my account and is refusing to send a password reset, so posting under a new username).

In answer to your various questions:

- Prices in some parts of London have come down, but that tends to be at the very high end (>£5MM), or in areas where a lot of new supply is coming online. Neither is true in our case - if anything there is a shortage of high quality supply. Recent press reports indicate that prices continue to rise.

- Property type: 3 bed penthouse apartment with a large roof garden

- Comps: there really aren!!!8217;t many, just because the property is quite unique. The only recent transactions were two new build apartments of similar size, each for around £1.5MM, in Nov 2017. Those apartments are more modern, but the spec isn!!!8217;t much different, and their location is far less good, they have less outdoor space etc.

BHS79 · 10 July 2018 at 9:53PM

Hi Silvercar,

I think the LTV would be around 70% based on the original purchase price. We are basically just looking to roll our existing debt at the 2 year point.

v6g · 10 July 2018 at 10:38PM

Considering that you bought at the absolute peak, that valuation looks about right. The percentage decline is certainly commensurate with other parts of London, and the ongoing corrections being observed in other global bubble cities in that price category (Sydney, Auckland, Vancouver, Toronto). As bond yields continue to gently rise over the coming 3-7 years you can expect the correction to continue.

As somebody commented above, comparing with listed properties, not actual sold prices is pointless given that in the £1M+ category in the UK, 85-90% of places never actually sell (a dirty little secret of the Britush property industry).

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Advice - crazy valuation (Countrywide)

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