Money for home improvements/remortgage devaluation?

[Giantpaw]

Hi all,
Wondering if someone more financially savvy can help me with this.

I desperately need a new roof. Estimate 10k. We also have damp and want to repair the floor where a radiator burst and ruined everything (not covered by insurance as the house is so old and not maintained, thanks previous owner)

We tried to remortgage to get the work done. Estate agent valuation was £290k. Current mortgage is £184k. Mortgage refused as valuation came in lower at £235k not leaving enough equity to borrow what I need. We asked for 15k. All I can think of is due to the fact it needs work I can’t complete that this is why it’s down valued, although I am now stuck in a catch 22. My neighbour next door just sold for £280k with one less bedroom.

If I apply with a different bank is the situation likely to be the same? The mortgage company wouldn’t allow an appeal so I have now fixed with a different bank and can’t switch so would have to approach current lender and ask for a new valuation (desktop is saying £250k online)

Other than buy raincoats and live with the rain coming in, any other suggestions? I’ve thought about a loan but the payment over 5 years is going to make things very very tight!

It will depend on the lender, but I’d be surprised if one lender valued it at 235 and another then valued it significantly higher. I’d also almost ignore the desktop valuation, I’d be guided by the valuation given by someone who has actively came and looked at the property.

I appreciate though that leaves you a bit stuck, a loan may be the only option perhaps over a longer term? Or a loan to do part of the work and then try and have another valuation done with the hope to then be able to remortgage for the rest?

Thank you @Mrsttcno1
Weve had 3 estate agents come in at 290k, 300k and 295k. Does this mean if I sold it for this (and I probably could very easily) nobody could buy it as the mortgage lender says no. Seems stupid if that’s the case as I could sell it 10 times over!

It’s hard because it’s a strange one to value. It’s a standard property but on the best plot in the area by miles, if you know the area that is. The valuer stated he was valuing it against properties ‘locally’ but actually there’s nothing local to compare it to, if that makes sense.

For context the plot next to us recently sold for 200k with less land so I was suprised! I purchased it as a wreck in 2020 for 210k and have had allsorts done from heating, fully plastered, all new windows etc etc. Really frustrating but it seems the last bit to finish it can’t be done 😄

Yes @Giantpaw that’s exactly right, that’s why to an extent it really doesn’t make any difference what the estate agents think. Most people need a mortgage to buy a house and so you could have someone offer you 290K and be very keen, but once their mortgage provider comes out to value it if they only value it at 235K then you’re in a position where they can’t proceed unless you are willing to reduce the price to that 235K. It has happened quite a lot where we live recently due to the house prices rising when actually the house isn’t worth that much, especially with new build homes, they are listed for a price but once mortgage provider valuation is done it comes in lower and you either agree to sell for the lower price or you lose the sale because even if somebody REALLY wants it, they can’t get a mortgage for the price you’re asking for so it’s impossible for them to proceed.

It is frustrating because it means you’re in a position where either you cut your loses and sell- knowing you’re not going to get anywhere near what the house is potentially worth because as is a mortgage provider won’t lend that much for it, or you take out a loan yourself to do the extra work. The only thing I’d say to be mindful of is that money in does not always equal money out when you sell. So just because you spend say 15k doing these jobs doesn’t mean that it will suddenly be worth 15k more when you sell.

It’s a really tricky one!

Thanks again for your time @Mrsttcno1 . The system needs an overhaul!

Im probably already in too deep. We’ve spent a fortune, maybe close to 50k I would guess to get it habitable. Unfortunately I need another 20k to get us over the finish line. We can’t sell it as it’s not finished, can’t afford to finish, can’t sell as a project as it’s not worth enough. Stuck every which way we turn really.

Suppose it’s best to just be grateful for what we have and get up on the roof with some tar and felt 😄

Take the loan, do the roof (there’s literally nothing more important to fix, you should have done this as Job No. 1) and then look to remortgage with another lender once it’s done. You can’t leave the roof - have you had several quotes? When is your current mortgage term ending?

We have 4 more years on the term so need to approach the lender directly and ask. We can’t ask until end of July/August as I need 3 pay slips as I’ve just returned to work.

We were planning to do the rooves first but they seemed solid. They have lasted since 2020 when we moved in but they are flat rooves so prone to perishing. The house has 6 rooves in total, one aspestos pitched and the rest are random extensions with flat and felt ones. I’ve had 3 quotes, all as expensive as eachother as we need the facias and guttering replaced also as it’s broken/rotten wood.