Surveyor valuing flat remortgage at £0

[MILLYMOLLYMANDYMAX]

Posted this before but think on the wrong thread.

So angry.
I have a small (27sq metres) 1 bed flat in London. I have renovated it and it is stunning inside. Oak flooring, White walls and limestone shower room. 125 year lease, and a 30ft private garden It is currently rented out for in excess of £1K per month. In May I approached my current mortgage company to remortgage to get money out to pay off some credit cards (renovation was a nightmare, everytime we did one thing we found more problems and stuff we had not budgeted for.) We also wanted to buy the next flat. Didn't think there would be a problem, flat had plenty of equity in it and the rental income would be more than adequate to cover the mortgage company's requirements. We paid the arrangement fee and waited, answering any questions that they needed to know the answer to. After 2 1/2 months and them knowing exactly our position from day 1 we were declined the remortgage because we owed too much money.
Annoyed but thought we would try a different mortgage company. Started again. First problem was the size of the flat. A lot of mortgage companies, wouldn't mortgage anything under 30sq m. Finally found one that did. Said they had no limit on size, no problem with credit card debt. We were completely upfront on size of flat asking several times that they did give mortgages on properties which were small, 27sqm. Again paid arrangement fee and survey fee.
Survey came back today. Despite someone already renting the property, and the fact the MC saying there would not be an issue with the size the surveyor has come back to say the value is £0 as the flat is too small and is no more than a crash pad. Apparently they sent a surveyor from Northamptonshire. We have spent nearly £800 on arrangement fees and surveys only to be told no because of an issue the companies were made perfectly aware of before hand.
Am I being scammed here? Has anyone else had an issue with surveyors or mortgage companies?

It seems very oddif you have a tenant in and it's clearly profitable...can you get some advice from a financial advisor as to which mortgage company would be best to go to?

Also, and separately, £1000 p/m for 27 sq ft makes me want to cry!!

Sounds like a nightmare I really feel for you. 1st company I would chalk up to experience and accept decision, 2nd I would put in a formal complaint and if not upheld and your arrangement fees refunded I would take it further - ombudsman or whatever is next step.

Could you take a mortgage holiday and use that to pay CC? Or sell the property to clear the CC and get a deposit on your next place, whilst your rennovation is all lovely and new and fresh. Can see why you would want to hold onto it - rental income, investment etc but if it is so small it causus these probs it might always be a bit of problem property for you iyswim. Good luck!

I have a lovely tenant and do not really want to kick him out. I asked the estate agent who manages the flats rental what the prospect of selling was on Friday afternoon and in just under 1 hour they had valued it and had a buyer at a good price but as I said I really do not want to chuck tenant out, he has to Christmas on current lease and has indicated he wants to continue for another 6 months at lease.
AC £1000 per month for 27square metres. This is central London. Close to all amenities and transport links within 100yards of large Sainsburys, Waitrose, Marks and Spencer and very good tube and bus links.

My real issues are the fact this is not the only time I have come across Surveyors who cannot value a property. It is beginning to be a rarity if they do actually put pen to paper and value a property.
Oh and we have just noticed that both mortgage companies used the same surveyors firm. One valued it at the same price as EA and one valued it at £0.

Last house we lived in was a 17th century thatched cottage with huge thick walls. When we sold the surveyor who came around look absolutely petrified as he walked around. He valued it at £0 as he thought it was so old the chances were it would fall down but he recommended that a structural engineer make a judgement of what work was needed to keep the house standing. Although he did note that there was no sign of settlement.
Buyer paid £600 for a structural engineer who came round, had a cup of tea. He looked around the house and told me how many surveyors could not value houses. He thought that considering the place had been there for over 300 years it would probably survive another 25 years.

nightmare! Surveyors just seem to get worse, I do wonder what they do for all those years at survey school.

BTW if the tenant has a fixed lease until Christmas, you can't evict him earlier to sell the house even if you want to.

I wouldn't dream of getting rid of my tenant until his lease was up. Don't really want to get rid of him.
Specialsubject you sound like you have had problems with surveyors. I wonder how many people have had to pay for this terrible non existent service.

Go to a proper whole of market mortgage broker if you haven't already?

It is not the mortgage broker that is the problem. It is when it comes to the survey when it gets silly. Latest one I do not think actually viewed the property. Number of floors wrong and number of flats in the block wrong and am sure he has an old floor plan as he appears to have missed a room out. We completely remodelled the flat so particular room does not appear on old plan.

It is annoying. But I think these valuations will be affected if there is a tenant in the property. Was it a buy to let mortgage as they have different rules. But I expect you know all this. I'd go to an independent mortgage broker/advisor type person. They will probably be able to sort something out. But it's not fair you were charged twice for surveys and then refused on account of size when that was pointed out already. Hope you get something sorted out.

It was a buy to let mortgage and they require you to have someone in the property so they can see rental income.
The first time was with an independent mortgage broker.

I have had the same thing happen on more than one occasion where a surveyor is unable to value something. It makes me wonder what I am paying for, or what their qualification really means

"we were declined the remortgage because we owed too much money." it sounds to me as though you have more problems than just the surveyor. Renovating a BTL on a credit card was not a sensible decision. It doesn't sound as though you could possibly be in a good position to buy the next door flat.

I think you should be telling your tenant you aren't going to renew his lease and plan to sell the BTL and sort out your finances.

What percentage of the flat is equity?

The value is zero not because it's actually worth nothing, but because it is too small to get a regular mortgage on. The surveyor's not got it wrong as such, surely? His job is to assure the mortgage provider it is good for security purposes.

Maybe they turned down the mortgage for multiple reasons. Having substsntial credit card or other unsecured debts is not good for mortgage application purposes....

Staircasing down (eg taking out equity by increasing mortgage) also not viewed favourably.

Having said all that, if you were clearly told by provider the size of the flat was not an issue then go through the provider's complaints procedure to try get your application fees back at the very least.

Debt camel I was not planning on using credit cards but we took up floorboards for plumbing and found a radiator had been leaking and joist needed replacing, we took up Laminate in main room only to find the whole thing needed levelling. It just ran over, far more than we budgetted for.

Ragusa. Mortgage Companies knew everything both times. The size of the flat and how much money was on credit cards. On both occasions we have been completely upfront and told them not to waste our time or theirs if anything was a problem. If the size or how much money I had on CC was a problem then we would have just moved on and found another MC but if you lay everything out and they say no problem you do not expect it to be a problem when you have paid out to this mc £600 for arrangement fee and survey.

At the moment we have approximately 60% equity in the property and a tenant who gives us a 14% return.

Certainly could have made in roads into my credit cards if I had not wasted my money and time with a load of liars.
My issue is the person who wants to buy it needs a mortgage, if we can not get a mortgage then how is he meant to.
I will not be getting rid of my tenant anytime soon.

It's going to appeal to cash buyers I would say.

Go through complaints, and if no go there, take it to ombudsman.

I would be very tempted to kick up a fuss with the surveyors too if you are paying them to do a job and they are not even visiting the property.