Both houses we have tried to buy have been downvalued

[spuddy56]

We are attempting to be first time buyers. Both the houses we have had offers accepted on have been downvalued by the mortgage company by 15k and 10k. The market is mental here. There's so little coming on and anything affordable for a first time buyer gets snapped up and goes over asking. The sellers won't reduce.

We've managed to save a 15% deposit for a 300k house/flat completely on our own while renting so there is no leeway or extra money from family to make up the extra in cash.

What can we do? Do we just give up and keep renting? We are so scared about buying at the peak and then not being able to remortgage or something. I'm so upset that after years of saving we are finally able to buy but still can't.

Just keep going thats all you can do. EASY and vendors will start to realise they're over valuing and things will start reducing. Keep an eye on rightmove for the ones you like and have missed out on, I've seen a lot come back on at a reduced price. Good luck.

*EAs

Thanks. Do you think we should reduce our deposit when they get downvalued or stick with what the bank says?

I’d keep your deposit the same and borrow less, unless you need the cash to do work to the house.

You won’t be the only one who has been told the property is over valued. Even if they won’t reduce, they may have no choice as most lenders are the same

Just keep looking

We don't have enough cash on top of the deposit. The sellers don't want to reduce. Could our lender (natwest) just be particularly cautious?

Do not pay over the odds. You can try negotiating with the vendors but tbh, they have pound signs in their eyes because of the crazy demand.

Keep trying until you have your genuine offer accepted and the valuation agrees. I have seen several properties be “sold” only to come back on the market a few weeks later.

Id say that means the market is about to drop. They don't want people in negative equity or unable to meet their mortgage payments so are being cautious. Make sure you don't pay over the odds.

Our house was down valued by our buyers mortgage company. Our broker said he is seeing it quite a lot at the moment. We accepted asking price offer but reduced and the buyers made up the difference - more than half way but everyone was happy. The house we are buying we offered over asking and it was valued at our offer by our mortgage company. Our broker suggested for a downvalue you can try a different lender or challenge the valuation but neither are guaranteed to be successful.

I should add we had other asking price offers from buyers with more equity/cash buyers and did consider putting it back on the market but our buyers were keen, organised and chain free and pragmatic and we need to move quickly. If you can find sellers in this position then there should be room for negotiation. True to their word our buyers have made it a quick and smooth process.

It's really tough, we've sold & are struggling to find anything. Anything we like is going for over & it's not worth it.

Do not pay over the odds

Agree

I would try to reduce your search price, so look for properties in the 250k mark, cheaper area or smaller property

@bellac11

I would try to reduce your search price, so look for properties in the 250k mark, cheaper area or smaller property

There's nothing in that price range unfortunately. One came up at 275 but we were outbid. We were initially looking at 270ish budget but it's just not realistic round here. We're about 1.5 hours from London and since covid prices have rocketed. Moving further north is a possibility but to be honest houses don't seem much cheaper!

Thanks all. So difficult to know what to do. The whole thing is so upsetting.

What areas are you considering OP? If you are not ties to an area I would widen your search, 1.5 hours from London is quite broad in anycase.

What are you needing from an area? Is it town or country? Good access to certain routes?

This happened to us except the lender down valued by 40k and vendors wouldn't reduce. We ended up going with a different lender who valued at the offer price (just had to make sure the second lender used a different surveyor to do the valuation).

www.rightmove.co.uk/properties/112253201#/?channel=RES_BUY

Some mild sanity coming into the housing market?
House prices are massively overinflated! Lending is insane.

Going against the grain - 10k undervaluation on a 300k house is not a big %. If you could afford it then I would go for it.

My first house was also downvalued by 15k. Vendor agreed to reduce the price by 5k and when I appealed the valuation, they increased it by 5k, so in the end I paid 5k over asking price. I loved the house and it was worth it to me. 3 years later I sold it for 80k more than I had bought it for.

@Chloemol

You won’t be the only one who has been told the property is over valued. Even if they won’t reduce, they may have no choice as most lenders are the same

Just keep looking

It might be to do with the percentage of loan to value , so say someone came along and was borrowing 50 % they may not bother to down value as there is adequate security.

@Unsure33
yes I think you are right. All lenders are bothered about is that the house/flat is going to be worth what they are lending you. If you want to borrow a big percentage of the total price they will be tougher on valuation than if the loan percentag is smaller. They care not a jot if you will lose your money but they don't want to lose theirs. There was much burning of lenders' fingers at the last housing price crash.

Just hold on, things will settle

Try a different mortgage lender

My DD has managed to save 15% deposit for a £120000 flat and now that she's finally got it all the flats are either snapped up immediately or have increased to £150000. She could get a mortgage but it would need to be for a longer time or lead to negative equity. She is quite disheartened with the whole thing after all who wants to live with parents at 32 years old. Hopefully prices will soon drop.