Mortgage valuation came back at £0

[Fantashtic]

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?

[Fantashtic]

Unfortunately the surveyor isn't answering his phone/getting back to us. The EA has come up with 10 similar houses in surrounding streets which have sold in last 8 months which the broker is using the in appeal.

[LittleBearPad]

How odd. Nationwide are painful.

[Ohanarama]

You should ask your lender for the contact details of the surveyor and phone them directly to ask exactly why they valued it at £0. My guess is that it's a mistake, surely properties in student areas are desirable and relatively easy to re-sell? Have other similar properties in the area sold recently?

[wowfudge]

Just would like to point out that just because 0 appears as the valuation several times doesn't actually mean someone has actively typed 0 into the valuation report. They will use a template either populated from another document/form or the figure may have been left blank for someone to check and amend and that might not have happened. Is it worth asking if it is a mistake? I've read what you've said they stated about the area, but even so.

[Barbeasty]

Have any similar properties in the area sold recently which you can provide evidence of? That's what we did when the valuer couldn't count the number of rooms he walked into and massively undervalued our house.

[karron]

Our house was valued at zero by the mortgage company because it did need lots of work. It ignored the land value and the salvage value of the house because it needed a full structural survey. We'd already had one done as it was a project house and they had valued it at £290,000 without the works that needed doing being completed and estimated it would cost £50,000 to get these jobs done. So in the end they agreed to loan us this amount less £50,000 retention.

So just really saying they do value houses at £0. The funny thing was they valued the rebuild cost at £450,000 which kept confusing people when I was trying to get insurance. It was accord, part of Yorkshire building society, that we got our mortgage through.

[camtt]

it sounds complete nonsense to say a house has a value of zero because it is in a student area which will affect resale value. It might affect resale value, but not, I'm sure to the point where the houses there are being given away for nothing. For a start, a lot of students seem to want to live in the area so you would think there is a decent buy to let market. They are taking the piss!

[RoganJosh]

If you do try a different lender, you should make sure they don't use the same surveying company. It may not be a problem where you are, but in my area 2/3 of lenders use the same surveyors.

[Fizrim]

strikeout fail there

[Fizrim]

I'd have to agree with thatstoast - the EA and the broker may be thinking of their commission. The value for rebuilding purposes is just that, it would cost that much to rebuild it.

I can't see why the lender wouldn't want to lend on the property unless there is a danger that they won't get their money back. They are only making money if they lend on it and you pay the interest, so it is in their interest for the transaction to go through.

If you don't go ahead with this property, bear in mind that if it was a free survey as part of the finance deal they will charge you for the next survey -grabbers-

You mention that you have lived in the area as students and as tenants, so has it got a high proportion of rental or HMOs?

Hope you get it sorted very soon.

[talkingcandy]

Another former underwriter here. £0 on a mortgage valuation means that for the purposes of security for the building society or bank the property is unsuitable. The standard valuation for a mortgage company is solely for the lender and does not give information for the purchaser.

I worked for a very strict lender, another building society, seems that they are more cautious then the banks.

Not necessarily a dead loss but if you are still keen on the property I would suggest commissioning your own survey if I was your broker. I second that Halifax are very good and can be flexible.

[Northernlurker]

I know somebody who had a zero valuation but it was because there were multiple problems with the house and indeed the land it was built on. In your case I think what this actually means is the lender doesn't want to lend on this house at the rate you thought you'd secured. very poor behaviour imo.

[CrapBag]

I'm not surprised you answered yes to that. At all. It's like they don't want to lend money anymore.

As I said we were with them for 5 years, paid off early, never missed a payment, had a deposit of 75k, mortgage payments would have been over a quarter less than what we had been paying, DH earned nearly 20k and they wouldn't lend more than 34500! Utterly ridiculous.

I'd just go with another lender. We found Halifax very good and it was very straight forwards as opposed to Nationwide coming back to us 3 times to ask for yet more information. We went through London and Country (after recommendations on here) and they found Halifax for us.

[lalalonglegs]

That is a bizarre valuation - have you phoned the surveyor to ask for his/her reasoning?

[PartyFops]

Are you in Cornwall Fantashtic?

[Fantashtic]

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.

[CrapBag]

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.

[VivaLeBeaver]

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.

[Fantashtic]

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

[prepperpig]

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.

[JeanSeberg]

Bizarre.

[Fantashtic]

Asking price was £220k @Jean

[JeanSeberg]

What was the asking price you referred to?

[Fantashtic]

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

[GiddyOnZackHunt]

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