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Original poster

Mortgage valuation came back at £0

39 replies

Fantashtic · 07/07/2015 18:49

We found a gorgeous house and made an offer over the asking price as it came down to best and final offers. It was accepted and mortgage applied for. The mortgage valuation came in at zero, because the area is 'majority student which will affect resale value' - despite the fact the house had several offers over the asking price. We've done our research and surveyor comments are wrong, area is under 50% student and in desirable postcode, so we're appealing it with v. supportive EA and broker.
Has this happened to anyone before? How long does an appeal like this usually take?

OP posts:

thatstoast · 07/07/2015 19:05

Is this for a residential mortgage? Which lender?

Personally I'd listen to the person whose job it is to value houses, rather than to the EA and broker who will get commission if you proceed. I say that with my (former) mortgage underwriter hat on.

prepperpig · 07/07/2015 19:10

The valuation of the house came in at zero?

That's clearly not right since it must have some value even if only for the land it stands on. Or am I misunderstanding?

fakenamefornow · 07/07/2015 19:13

Does the house need repairs to make it habitable that would cost more than the value of the 'done up' house?

Original poster

Fantashtic · 07/07/2015 19:13

We've lived a few streets away from house for 12 years (as students and renters) and it's a great area and house is next to public gardens, 5 mins from city centre, all local streets are mix of students and families... Seems a bit arbitrary as all other streets are same?

OP posts:

ShatnersBassoon · 07/07/2015 19:14

So it has no value, even as a student let? That's nonsense, and must be a mistake. Why would a valuer make a fool of themself by saying a home and the land on which it stands is worth nothing?

Original poster

Fantashtic · 07/07/2015 19:15

@fake - the house is immaculate, utterly beautiful and needs no work at all

OP posts:

JeanSeberg · 07/07/2015 19:16

What was the asking price?

Original poster

Fantashtic · 07/07/2015 19:17

Also, he did write a value for land and rebuilding of about £40k below the sold price

OP posts:

prepperpig · 07/07/2015 19:17

This must be a misunderstanding. Do you mean the bank has said they won't lend you anything based on the valuation? You can't mean the house itself isn't worth anything. I'll buy it for £5k and I haven't a clue where it is!

prepperpig · 07/07/2015 19:19

So it does have a value.

I still don't understand the £0 valuation but the value for land and rebuilding is always below the market value of the house. My house and land for rebuilding purposes is about half the market value of the house.

GiddyOnZackHunt · 07/07/2015 19:19

It just can't be zero. They must have mistyped the number surely? Or have they gone on to say zero in their comments?
That's ridiculous.

Original poster

Fantashtic · 07/07/2015 19:20

Honestly, it's a £0 valuation, that's what the report says and why we are appealing. Broker and EA both say it's inexplicable.

OP posts:

prepperpig · 07/07/2015 19:24

It can't have a positive land and rebuilding value but a zero property value. That figure must be the amount the mortgage provider is prepared to lend.

Just go to a different mortgage provider. Will probably be quicker than trying to get this valuation overturned.

Original poster

Fantashtic · 07/07/2015 19:25

£0 is typed several times so it can't be an error - it's so weird.

OP posts:

GiddyOnZackHunt · 07/07/2015 19:27

I don't doubt what you're saying but it is utterly bizarre.

Original poster

Fantashtic · 07/07/2015 19:28

That's interesting @prepperpig - we were advised multiple mortgage applications could adversely affect our credit rating but I guess one unsuccessful application plus one hopefully successful one would be ok? Also, lender is UK's largest lender so we thought would be best...clearly not

OP posts:

JeanSeberg · 07/07/2015 19:31

What was the asking price you referred to?

Original poster

Fantashtic · 07/07/2015 19:35

Asking price was £220k @Jean

OP posts:

JeanSeberg · 07/07/2015 19:36

Bizarre.

prepperpig · 07/07/2015 19:36

I haven't bought a house for five years and so things might have changed but why would multiple mortgage applications adversely affect your credit rating (unless you were turned down for one)? You haven't been turned down, you've just found a house that they don't think is worth lending on.

Original poster

Fantashtic · 07/07/2015 19:39

Good point Prepper, haven't done any research so will speak to broker about it. Thanks all for comments.

OP posts:

VivaLeBeaver · 07/07/2015 19:43

I'm guessing they dont really think it's worth zero but just that they don't want to lend you the money as they don't think the house will be easy to resell if you were to default on the mortgage and they end up repossessing it? Dunno, but it's very odd.

Years ago I put in an offer of 30k on a house and the valuation came back at 13k. I ran like the wind. Loads of structural type work which needed doing.

CrapBag · 07/07/2015 20:23

The only time this has happened to me is when it was non standard construction (BISF-steel framed house) and they were asking for a structural engineers report. We walked away at that point anyway.

You say the biggest lender, is it Nationwide? If so they are ridiculously fussy and after they initially told us we could borrow up 105k and we only applied for 60k and turned us down saying the would only lend 34500k we told them thanks but no thanks. We had been with them for 5 years, paid our previous mortgage off early, never had a problem paying and they wouldn't even lend 2x DH's wage.

Halifax were more than willing to lend 60k without any problems whereas Nationwide had us jumping through hoops and kept coming back asking for more and more paperwork, it was ridiculous. I'd never bother with them again actually.

Original poster

Fantashtic · 07/07/2015 20:27

Yes it was and that is really interesting about Nationwide... It was a very good fixed term offer we applied for with them so maybe they just don't want us to qualify for it! Argh.

OP posts:

PartyFops · 07/07/2015 20:31

Are you in Cornwall Fantashtic?

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