Unfair house valuation - WWYD?

[Klaudiagal]

We have bought a 4 bed property less than 2 years ago in Teddington for 550k. It was in a very bad state, but since then we insulated the house from outside, insulated the attic, changed roof over extension, rewired, changed Lino flooring into oak wood and porcelain tiles, new bathrooms, new kitchen, replastered walls and ceilings and put a beautiful bifold doors to patio.. according to property price index, the value of property went up to 588k (did not take into account any work we did), but in the meantime we had 3 estate agent valuations between 680k to 735k (this one last week).
As we are planning to remortgage soon, we requested property valuation from our current mortgage providers, for which we were charged over £500, and we estimated the property value at 700k based on previous valuations. They sent a 20-sth year old girl who obviously was very inexperienced (she asked whether the house was built in 1998, when it is built in 70s and previous surveyor even gave us an exact year based on the specific way it was constructed). I can add that the house is in Teddington 5 minutes from Thames and bushy park, so definitely not an area that decreased in value recently. We got valuation updated today to 580k!! Less than what property price index would suggest!!! And after all the extensive renovations we did.
I called the bank and asked whether they can request a reasoning behind going that low, especially that the house next door is on the market for over 700k, but they refused to do anything or provide any details behind this valuation.
AIBU thinking that since I paid £500 for this valuation, I should have a document showing the reasoning behind it?
What do I do now? Can I put a complaint? I think it is just a blatant incompetence OR bank trying to get more expensive mortgage out of me. Anybody can advice ? Mumsnetters, please help, I am just gobsmacked!

*Hi, you are right and I fully agree, but the house I am comparing to is the same estate, similar style and age, and similar size (a bit smaller actually) so it is a fair comparison..

Just making a point that I am not expecting mine to be any similar to a pretty Victorian in the next street, I am well aware of this difference and it is not at all source of my moaning*

I know you're not don't worry! If it's the house in Addision Road you're referring to I think that is actually quite a lot more attractive than yours (please don't take offence, our house is also not attractive, we don't all have the cash to buy pretty!). I don't think it's a good comparison TBH and I would expect it to be worth more than yours. It's also on the market for 700k. Our neighbours a while back put thier house on the market for what we thought was 100K over what it was worth. They got an offer 90K less than marketing price. We live in a slightly cheaper area too. You really can't judge value by what others are marketing theirs at.

I really don't understand why the OP is getting such a hard time here?

She's not a ' greedy landlord' she's not trying to 'flip it', she's not trying to 'turn a profit'. She just wants the bank to recognise an increase in the value of her property to increase her LTV ratio and get better mortgage rates.

Our road is also a mix of newer houses, Victorian and Edwardian. You absolutely cannot play armchair detective and compare two 3 bedroom houses. Or even a 3 and 4 bed house. The rooms will be different sizes, some will only have one toilet and the gardens will be massively different.

The house next door to us is a 4 bed and recently sold for £600k. We bought ours 2 years ago as a 4 bed for £750k. But they're both 4 bed?

Well yes but the one next door is 4 bed as they've gone into the loft and now got two box rooms ont he first floor. Ours have 4 double rooms without the loft. We've got an extra reception room and one more bathroom. They don't have a downstairs loo. Our garden is twice the size. And ours had new windows and flooring whilst next doors will need new windows and a roof soon by the looks of it

None of the above could you get from looking at the sold prices.

If the Op is in the area she may be a little more well versed on what has contributed to sold prices of houses in her estate.

@Hettar

I think the OP is getting a harsh time here. Ots perfectly reasonable to query the value as it will affect her mortgage. I'm a valuer and do think that value is low. The old saying for valuing property is that it's an art as well as a science.

The valuation will be based on comparable data. The better the comps the more reliable and more comfortable the value will be. In a situation like this, where there is somewhat limited evidence, the value needs to use more if their own judgement. As all values are different you'll often have them provide different values for the same property. None of these are necessary right or wrong as long as the rationale used by the valuer is reasonable.

In terms if evidence, sold prices are the nest but asking prices for properties on the market can be taken into account.

Best of luck OP

Thank you very much!

@GETTINGLIKEMYMOTHER

I’m not far away from there, OP, and I agree, it does sound very low.

Looks to me as if they’ve simply added the local percentage increase to the previous sold price. Which doesn’t work if you’ve undertaken major renovations.

Just because someone’s well qualified, BTW, it doesn’t necessarily follow that they’ve got much common sense.

Thank you !

She actually went below the local price increase (ie property index price) which I find really unreasonable without any validation.

I recently had this issue with my house. The bank (halifax) provided me a form to compare my house with 3 others of a similar spec that have sold within the last couple years.

Their reason for the under valuation is due to covid. We also had estate agents give us much higher valuations but because their surveyors are not able to go inside the property to see the spec, they go off the sale images (unfair I know).

If you paid for the survey you should have the right to see it. They sent us our surveyors assessment. It was basic (halifax also admitted to doing drive by surveys too).

OP you're coming across as very reasonable with reasonable questions! I'd also be p'd off if I coughed up £500 for a figure with no rationale - thanks to this thread if I'm ever in this position I'll check first what my money is buying wrt surveys.

I don’t think the OP is getting a hard time for disagreeing with the valuation but her attitude to the surveyor is IMO inappropriate. Disagree with the valuation, get another, examine the justification for errors- all good. Assume someone is incompetent based on age and sex and a comment on brickwork - then seemingly try to justify being patronising - is simply bad behaviour IMO.

@Africa2go you clearly don't know the range about the range of ex-council housing in London then.

I know people who live in ex-council housing that is Georgian, Victorian and Edwardian as well as from different decades in the 20th Century.

Part of the problem surveyors have in parts of London is that some of ex-council properties are unique in their design, so when they do a valuation it is hard to find comparators.

@Viviennemary

I think you've been treated unfairly. You could request a return of say £250. They might agree to this especially if you threaten to take all your custom elsewhere. If you get nowhere complain to the bank ombudsman.

Natwest has:

• stopped me to query the valuation, which I am entitled to as I paid for it, but I need them to send me the form to fill and start the procedure (as they commissioned the valuation) and they are Refusing to do so
• they tried to tell me that I am not eligible to see the valuation report even though I paid for this report. It took 3 calls and finally they said that of course I should have it

Based on that I am not even going to try to ask them for any refund and my business is as lost for them as the fate of dodo birds..;)
I will also be taking them to ombudsman as they are breaking my consumer rights to disabling me from querying the valuation

The valuation sounds very low and I hope you get it sorted out.

That being said I really want to point out that a 20-something individual is not a 'girl'. She is a young woman. It's very patronising to refer to young adults as girls and boys.

I am particularly touchy about this as I am petite and round faced so people assume I am younger than I am. That's fine now I'm 60 but when I was a young looking but experienced and highly qualified building society manager it was irritating to have people assume I didn't know what I was talking about. However it was always a pleasure when they would try to go over my head to the one of the older, male , assistants only to be corrected and referred back to me.

If they are lending you more money now, they have to build in the mega market drop coming in the next two years....

[quote SofiaMichelle]@Klaudiagal

I am merely saying the the house on my estate next door is for sale for £700k so I need evidence why she thinks it is irrelevant.

Put your house up for sale at £800k. In fact, put it up for £1m!

You can advertise a house for sale at absolutely any price you choose.

Why would a surveyor value your house based on what someone has decided to advertise theirs at?[/quote]
Assuming this person wasn't actually surveying the property but valuing it for the loan, they will routinely compare it with the prices being asked and obtained for similar local properties.

If it’s BTL (is it?) given how hard it is to remove tenants now they probably value them like old “sitting tenant” properties, 30-50% discount...

I think the issue here is firstly it’s less than two years since you bought it. Secondly you habe spent 60k, and looking at recent sold prices (which is what you need to look at not prices property is marketed at, it would seem your property is valued correctly or at the low end of correct, but you paid far too much for it less than two years ago, if it was in that bad condition.

So for example in the condition you describe, if you’d paid 475 which was in line with other property sales at the time, then spent sixty k and it was valued at 580 you’d have made a profit and made your money back on the renovations. But because you paid so high it is not working out that way

You need to base it on what the recent sold prices are, not what someone is marketing their property for. Nothing has sold at that price in your area. The fact a neighbour is marketing at that, doesn’t mean that’s the properties value. It could be highly over priced.

However on saying that there is nothing coming up for having sold for 550 in the last five years so something is adrift here, or I’m missing it?

You can query the valuation but I can tell you all mortgage valuations are coming in low at the moment. I’m currently buying an investment property in SW London, not far from Teddington but further in. And the valuation has come back very low. That’s actually in my interest as a buyer & I have used it to negotiate the price down. But there’s a reason mortgage rates are rising and valuations are low - economic downturn and price falls are expected due to Covid + Brexit.

So you might go through the whole process again with the same result.

@PremiumRoll

£700k gets you a 4 bed house in Teddington?! Let’s all move to Teddington!

You assume we 'all' have that kind of money...

Some sense of this thread! In a stagnant/decreasing market the OP thinks just because her house is in Teddington it should have gone up around £150k in 2 years...

@Bluntness100

I think the issue here is firstly it’s less than two years since you bought it. Secondly you habe spent 60k, and looking at recent sold prices (which is what you need to look at not prices property is marketed at, it would seem your property is valued correctly or at the low end of correct, but you paid far too much for it less than two years ago, if it was in that bad condition.

So for example in the condition you describe, if you’d paid 475 which was in line with other property sales at the time, then spent sixty k and it was valued at 580 you’d have made a profit and made your money back on the renovations. But because you paid so high it is not working out that way

You need to base it on what the recent sold prices are, not what someone is marketing their property for. Nothing has sold at that price in your area. The fact a neighbour is marketing at that, doesn’t mean that’s the properties value. It could be highly over priced.

However on saying that there is nothing coming up for having sold for 550 in the last five years so something is adrift here, or I’m missing it?

It's been linked upthread already. I think you are right about the OP paying too much if it was in the state that they have described, this one seems to have been more in line with what would be expected for a bit of a wreck on that estate. But I think prices have started to drop anyway since 2019, so it's not a case of houses automatically increasing in value as they have been doing in recent years, and if banks are expecting a potential property crash then it makes sense that they are valuing at the low end.

OP if they are now valuing at £580k then it's still an increase of £30k in less than two years which is not bad at all. It's a shame all the work you have done isn't reflected in the valuation by the bank, but if you haven't done any structural work/extended it makes sense that it has been valued like that. It does seem odd that you aren't being allowed to see the valuation though.

I think what is happening is in your area there are 2 different sizes of house but in the pictures you can’t necessarily see the difference as they look very similar and people and the surveyor are getting confused.

Having looked around there are houses like yours that are around 1300sq ft and are up for sale for around the £700,000 mark and then there are houses that look very similar that are around the 800-900 square feet that have been sold for a lot less.

60k is a hell of a lot of money to spend on a house that size and value full stop but particularly without extending. It’s 10% of the total value, but you’re not adding 10% to the size.

Those kind of modern boxes on modern box roads tend to have a ceiling. It’s always worth considering the ceiling when looking at developing the property.

Interesting how many comments that updating etc makes very little difference to the value, when I've been told by local estate agents that poor decorative order will drop around 10% off the market value of my house. Either the cosmetic state of a house makes a difference to the value, or it doesn't - can't have it both ways!

To be honest the fact that the surveyor didn’t recognise the house (& estate) as 70s is shocking but actually, more shocking, is that surveyors are meant to do pre-survey checks which should have easily highlighted the property’s era to them. Issue #2 is that the corporate survey companies expect their surveyors to do 6 in a day - it is not compatible with doing a good job!! You should definitely take this further with both Natwest, who are indeed violating your consumer rights, and also L&G who should be answerable for questions pertaining to their work. Finally why are you getting a VAL done before agreeing a mortgage? Always shop around first.

Valuations which are provided out by mortgage companies etc are not the resale value which depends on supply and demand in a particular area. They are usually done on the cost of rebuilding which, particularly in your type of area, will be a lot lower than the market value.

@Confusedandshaken

Assuming this person wasn't actually surveying the property but valuing it for the loan, they will routinely compare it with the prices being asked and obtained for similar local properties.

"Obtained" is ok. "Asked" is not.

As I said, anyone can ask any price they want for their property. It has no bearing on its value, whatsoever.

And @Bluedeblue why do you say "No you can't" in response to my statement that you can ask whatever price you like?

Who is stopping you? No one.

It doesn't matter what mortgage anyone can get. Asking price has no connection to mortgage valuation. That all comes later when someone tries to buy or mortgage the property.

And there we are, back at OP's predicament...

You can only go to the ombudsman when you disagree with the findings of an informal complaint. Put in a complaint over the phone or writing, they'll assign someone to investigate and then you'll probably get a "goodwill" partial refund.

If you disagree with their investigations, then they'll provide you next steps on how to contact the ombudsman.