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    • ClaireMC
    • By ClaireMC 10th May 18, 4:14 PM
    • 27Posts
    • 40Thanks
    ClaireMC
    Remortgage valuation eyewateringly low!!
    • #1
    • 10th May 18, 4:14 PM
    Remortgage valuation eyewateringly low!! 10th May 18 at 4:14 PM
    Hi

    Looking for some advice based on experience. Just looking to remortgage my house, was going to sell it but as the market is sluggish and rather unpredictable have decided not to.

    I know Estate Agents over value to get business but I was quoted an average of 725K (700-750 from 5 EAs)- more realistically I would think it would go for 675-700K. However the Santander valuation has just come in at 575K!!! A house a few doors down which is 50% smaller than my house has gone for 605K just recently and another similar to that but a bit smaller for 550K. Our row of houses is very unusual in the area and they sell rarely so it is hard to look at past sales but I think the surveyor has not been able to compare them properly.

    As you can imagine shocked and a bit upset. Do Santander accept appeals and is it worth appealing - what I have seen (though very old) seems to indicate that it is not worth appealing?

    Thanks for any insight that you can offer.

    Claire
Page 2
    • ClaireMC
    • By ClaireMC 11th May 18, 11:00 AM
    • 27 Posts
    • 40 Thanks
    ClaireMC
    I had assumed it was a case of 'what an EA claimed they could sell it for' vs 'what a bank would lend to buy it for' - the valuation will be less optimistic than the EA, plus the bank is unlikely to lend 100% LTV.

    Furthermore, given the OP was talking about remortgaging because they wouldn't sell, I had inferred the main basis of their post/rant was that they're going to get far less money from the bank than they thought they were 'promised' by the EA, part of which is usually account for by the buyers' deposit (which the bank isn't overly concerned if the buyer loses due to a fall in house prices...)
    Originally posted by ReadingTim
    Not ranting Tim - just asking. After 18 years there I have a good chunk of equity in the property so if anyone will lose out it is me not the mortgage lender! And the EAs 'promised' me nothing - it is just a guide.
    • Aylesbury Duck
    • By Aylesbury Duck 11th May 18, 11:02 AM
    • 2,315 Posts
    • 3,137 Thanks
    Aylesbury Duck
    I am looking to raise money as a deposit on another house (we have moved counties and are renting at the moment). I would much prefer to sell the existing house but due to the market we are going to rent it out instead (another one of those accidental landlords unfortunately).
    Originally posted by ClaireMC
    And that seems to be the answer. You don't think it will sell at what you believe it to be worth, so you're renting it instead. The mortgage lender seems to agree with your assessment of its relative value. Perhaps they are not confident that its value will rise in the future either, and may even fall?

    You've nothing to lose by challenging it but the relative uniqueness that you describe as a selling point makes it very hard to value accurately so I don't think your points of justification will help.
    Please forgive the deliberate omission of apostrophes on some posts whilst I await MSE to do something about the daft codes that appear in their place when typing on certain devices.
    • JimmyTheWig
    • By JimmyTheWig 11th May 18, 11:06 AM
    • 11,715 Posts
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    JimmyTheWig
    2. We received an offer of 675k in Jan/Feb which fell through as the buyer was self-employed and could not secure his mortgage.
    ...
    I understand the market and that a house is only worth what someone will pay for it.
    Originally posted by ClaireMC
    So, when it was on the market, what was the best someone (proceedable) was prepared to pay for it? Did you get any other offers?
    • ReadingTim
    • By ReadingTim 11th May 18, 11:11 AM
    • 2,934 Posts
    • 4,319 Thanks
    ReadingTim
    I have gone about this sensibly folks and I am not greedy or unrealistic. I understand that surveyors err on the side of caution (as do I) but I think in this case all the evidence points to the fact that the valuation seems very wide of every other professional estimate. Indeed it is around 20 per cent lower than everything else and I know that the market is volatile at the moment but the valuers estimate of 575K does not seem at all accurate.

    1. Valuations in the last 12 months from Estate Agents (I have emails and letters from them)
    a. 700k-725k
    b. 700-725
    c. 717k
    d. 700k
    e. 710-750
    f. 700k
    2. We received an offer of 675k in Jan/Feb which fell through as the buyer was self-employed and could not secure his mortgage.
    3. The property is unique in the area as it is a Victorian building formerly part of a conversion; there are only two other houses like it in neighbouring blocks and they have not been up for sale in over 18 years.
    a. There have been two house sales this year on my street
    I. Property One; asking price of 550k and they accepted 525k in Jan as they wanted a quick sale which they got. This property is 1222 sq. ft. of living space.
    II. Property Two; asking price of 600k and was sold for 605K in April. This property is 1249 sq. ft. of living space.

    My property is 2100 sq. ft. of living space.

    According to Land Registry figures of sq. footage for terraced properties in the area, this currently stands at 394 per sq. ft., even if we said that conservatively this is reduced to 350 that would still value my property at 735k. Current Estate agents have said that all properties on my road go for over 400 per sq.ft. and sales over the last few years, including the recent two, corroborate this. If we were to look at the surveyor's valuation this would equate to 273 per sq. ft. Land Registry has 1-2 bed flats in the area selling at 384 per sq.ft.!!

    I understand the market and that a house is only worth what someone will pay for it and I am not pushing for the top-end estimate as I know that I would not pay that and I think the EAs are unrealistic but equally so is this valuation if you look at the facts. Not sure why some people are so upset - all I am seeking is some advice - thank you @eddddy & @ ex surveyor in particular.
    Originally posted by ClaireMC
    Well, at the end of the day, the "someone" that is Santander will only "pay" 575k for it. You'll have no more luck justifying why they should up their offer with all of those stats than you would with Mr and Mrs Joe Public - after all, it's their money, their rules.

    If you don't like that amount, find someone else - another lender and see if they think different. Or put it back on the market and avoid the reluctance of landlordism. In either case, based on your experiences to date with the attempted sale and then remortgage valuation, you may want to adjust your current price expectations.
    • ClaireMC
    • By ClaireMC 11th May 18, 11:21 AM
    • 27 Posts
    • 40 Thanks
    ClaireMC
    So, when it was on the market, what was the best someone (proceedable) was prepared to pay for it? Did you get any other offers?
    Originally posted by JimmyTheWig
    Yes one at 700k but they couldn't sell their property and one at 675K which I accepted and then last month it fell through.
    • Aylesbury Duck
    • By Aylesbury Duck 11th May 18, 11:44 AM
    • 2,315 Posts
    • 3,137 Thanks
    Aylesbury Duck
    Yes one at 700k but they couldn't sell their property and one at 675K which I accepted and then last month it fell through.
    Originally posted by ClaireMC
    Neither was a proceed-able offer then. The first one was just made-up money from a buyer with an over-valued property themselves. Why did the second one fall through?

    It does seem that you don't have the evidence to back the higher valuation figures. On the contrary, you have evidence to suggest they weren't realistic. The mortgage valuation is looking more and more realistic.
    Please forgive the deliberate omission of apostrophes on some posts whilst I await MSE to do something about the daft codes that appear in their place when typing on certain devices.
    • ClaireMC
    • By ClaireMC 11th May 18, 11:59 AM
    • 27 Posts
    • 40 Thanks
    ClaireMC
    Neither was a proceed-able offer then. The first one was just made-up money from a buyer with an over-valued property themselves. Why did the second one fall through?

    It does seem that you don't have the evidence to back the higher valuation figures. On the contrary, you have evidence to suggest they weren't realistic. The mortgage valuation is looking more and more realistic.
    Originally posted by Aylesbury Duck
    The guy was self-employed and his profit was down after his last accounts submission. So a much smaller house selling for more than Santander's valuation last month and sold data from Land Registry is not realistic - ok!? No worries. I am actually after information on appeals procedures not valuation but thanks for the comment.
    • caprikid1
    • By caprikid1 11th May 18, 12:19 PM
    • 655 Posts
    • 641 Thanks
    caprikid1
    I should also point out that whilst an "Eye Wateringly" low valuation might be an issue you have to remember that this is only one factor the lender is looking at. The other factors is the likely market rent AND the stress testing. Both of which can affect the amount offered. It's no longer like a straight residential remortgage where subject to income 90% is probably achievable.


    I was only looking to borrow at an LTV or under 50% but as the rent and stress test did not work they lend me a total of about 45% LTV.


    So it may not be the valuation that is now the issue it could be the predicted rental income coverage.
    • JimmyTheWig
    • By JimmyTheWig 11th May 18, 3:15 PM
    • 11,715 Posts
    • 11,293 Thanks
    JimmyTheWig
    I am actually after information on appeals procedures not valuation but thanks for the comment.
    Originally posted by ClaireMC
    What information do you want?
    Is it how you lodge an appeal? I'm sure Santander can tell you that better than we can.
    Is it opinions on whether you appeal will succeed? I think you're getting them.
    Is it suggestions on what to say in your appeal? We need to establish why we think they are wrong, but unfortunately aren't getting very far with that.

    Remember that we are strangers on the internet. It really doesn't matter what we think. If you think that we are wrong and that your appeal will succeed then go for it. We might, however, be thinking along the same lines as the surveyor in which case it is worth your while in thinking about what we are saying.
    • franklee
    • By franklee 11th May 18, 6:15 PM
    • 3,730 Posts
    • 4,017 Thanks
    franklee
    I am looking to raise money as a deposit on another house (we have moved counties and are renting at the moment). I would much prefer to sell the existing house but due to the market we are going to rent it out instead (another one of those accidental landlords unfortunately). We have seen a house put an offer in as we had the AIP but this valuation scuppers the whole plan!!
    Originally posted by ClaireMC
    Are you currently with Santander on a residential mortgage? Will they give consent to let? I'm wondering if you would be better off going to a mortgage broker and getting a buy to let mortgage. If you tell the broker of the valuation issues he may be able to recommend a lender more likely to value differently as he probably knows the reputations each lender has.
    • Cakeguts
    • By Cakeguts 11th May 18, 8:12 PM
    • 4,862 Posts
    • 7,225 Thanks
    Cakeguts
    I have read right through this thread very carefully and I am totally confused. The low valuation was for a remortgage not for a sale? I can very easily see why these will be different. The bank has to protect itself in case of a default. Its assessment of the situation is that this property is difficult to sell because it is not the usual property so if it had to repossess it and sell it at auction it might have a limited market.

    You say that the market is sluggish but it isn't because two houses close by have sold recently. I think what you mean is that the market for your type of house might be sluggish and that is what the bank have picked up on. If they have to sell it quickly as a repossession to get their money back they might not get more than their valuation for it.

    Size doesn't make a house more valuable. There is a house next door here that is much bigger than several surrounding it but it won't sell for anymore than the smaller ones because of the garden which is all at the front and which has to used as parking for the cars as well. So basically your only garden is also your off street parking. To think that a house is going to be worth more because it is bigger is just wishful thinking. The bank doesn't think it is.

    As a rental it won't rent for significantly more than a smaller one either. What is putting buyers off will probably put renters off as well so they aren't going to pay a huge rent for it plus the return you get on more expensive houses is smaller anyway even if they let easily.

    The simplest thing to do would be to sell it for what you can get for it. For a rental property you have to be able to pay the mortgage for at least 6 months if you are not getting any rent. This is the length of time it can take to evict a non paying tenant.
    • lookstraightahead
    • By lookstraightahead 11th May 18, 10:52 PM
    • 403 Posts
    • 381 Thanks
    lookstraightahead
    If you are remortgaging then todays price is not as relevant as your house value over the next few years and so maybe the general view is that there are rocky times ahead.
    Last edited by lookstraightahead; 11-05-2018 at 10:55 PM.
    • wesleyad
    • By wesleyad 12th May 18, 9:25 AM
    • 289 Posts
    • 246 Thanks
    wesleyad
    I really don't get why you don't keep it on the market. You say you would prefer to sell and you aren't happy with the remortgage value. You say market is sluggish, but you also had two offers at an acceptable price (unfortunately falling through). So whats stopping you keeping it on the market a few more months?

    If you let remember everything that goes along with that (consent to let or BTL mortgage, extra stamp duty if you buy in UK, new rules reducing interest deductability for higher tax payers)

    Is it currently on a residential mortgage? Even if you appeal valuation what if they decline consent to let (which would be highly likely, you cant ask for CTL straight after getting the mortgage as it would be clear to them you never had intention of living there)
    • Thrugelmir
    • By Thrugelmir 12th May 18, 11:48 AM
    • 59,801 Posts
    • 53,135 Thanks
    Thrugelmir

    1. Valuations in the last 12 months from Estate Agents (I have emails and letters from them)
    a. 700k-725k
    b. 700-725
    c. 717k
    d. 700k
    e. 710-750
    f. 700k
    2. We received an offer of 675k in Jan/Feb which fell through as the buyer was self-employed and could not secure his mortgage.
    3. The property is unique in the area as it is a Victorian building formerly part of a conversion; there are only two other houses like it in neighbouring blocks and they have not been up for sale in over 18 years.
    a. There have been two house sales this year on my street
    I. Property One; asking price of 550k and they accepted 525k in Jan as they wanted a quick sale which they got. This property is 1222 sq. ft. of living space.
    II. Property Two; asking price of 600k and was sold for 605K in April. This property is 1249 sq. ft. of living space.

    My property is 2100 sq. ft. of living space.
    Originally posted by ClaireMC
    One acceptable offer in 12 months though suggests that the demand isn't there though. Lenders will be looking to redeem the mortgage in a timely fashion. Not wait months for the property to sell. In the eventuality that they need to. This will be the basis on which the surveyor has valued the property. Totally different to someone that views it as there long term home. Much living space is simply air. This costs nothing to construct.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • Crashy Time
    • By Crashy Time 14th May 18, 2:08 PM
    • 6,519 Posts
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    Crashy Time
    One acceptable offer in 12 months though suggests that the demand isn't there though. Lenders will be looking to redeem the mortgage in a timely fashion. Not wait months for the property to sell. In the eventuality that they need to. This will be the basis on which the surveyor has valued the property. Totally different to someone that views it as there long term home. Much living space is simply air. This costs nothing to construct.
    Originally posted by Thrugelmir

    As is much "equity" that people thought they had.
    • Crashy Time
    • By Crashy Time 16th May 18, 9:27 PM
    • 6,519 Posts
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    Crashy Time
    http://www.dailymail.co.uk/money/mortgageshome/article-5733321/Beware-red-danger-signs-house-prices-Young-buyers-borrow-record-sums.html#comments
    • jimbog
    • By jimbog 16th May 18, 10:08 PM
    • 730 Posts
    • 1,276 Thanks
    jimbog
    From your link:
    Prices are still 2.2 per cent higher than they were a year ago.
    The problem with quotations on the internet is that you can never verify their authenticity - Abraham Lincoln
    • sevenhills
    • By sevenhills 16th May 18, 10:18 PM
    • 1,526 Posts
    • 566 Thanks
    sevenhills
    https://www.zoopla.co.uk/house-prices/uk/

    Look around online, as a guide to what it worth? If your house was sold and they have the sale price, Zoopla will project the house price increases/decreases forward.

    • Crashy Time
    • By Crashy Time 18th May 18, 11:08 AM
    • 6,519 Posts
    • 2,439 Thanks
    Crashy Time
    From your link:
    Prices are still 2.2 per cent higher than they were a year ago.
    Originally posted by jimbog

    Somebody will be along in a minute to tell us that millions are just getting on with their lives every year, buying over-priced houses with not a care for where interest rates are heading
    • buggy_boy
    • By buggy_boy 18th May 18, 11:44 AM
    • 535 Posts
    • 393 Thanks
    buggy_boy
    Somebody will be along in a minute to tell us that millions are just getting on with their lives every year, buying over-priced houses with not a care for where interest rates are heading
    Originally posted by Crashy Time
    And only one muppet that sold gambling on his amazing powers of prediction to predict a house price crash..... Hows that rented bedsit Crashy.... You could have been mortgage free by now... Oh dear!!!
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