House valued at £0. Help!

[Compendiumoffluff]

I'm a first time buyer and I'm at a loss with what to do as I really want this house. Made an offer in August which was accepted but home buyers survey picked up problems with a sunroom which is an add on temporary structure and asked for a damp and timber survey. The valuer came back with a value of £0 until these issues were investigated further.

I then paid for a structural engineer to come out who confirmed the sunroom needed either knocking down, underpinning or rebuilding but confirmed it made up 0.75% of the total property, was a temporary structure and could easily be resolved by any of the above options. Timber and damp survey came back with a 2.5k quote and knocking down of the sunroom will be about 2k tops.

The valuer still came back with a value of £0 but would value the house at asking price if invoices of the above work are provided. The problem is that the vendor cannot afford to do the work and I cannot do the work until exchange of contracts (which i cannot do without a mortgage).

I've gone back to the mortgage company who said they go on what the valuer says and the valuer says they are tied to rules set by the mortgage company. We are going around in circles and the only option i have now is to go with a different mortgage provider and pay for another valuation with a different valuer. This is still a gamble considering I have now paid £1.5k for these surveys which have gone nowhere and would have to pay another £300ish for another valuation with no guarantees they wouldnt come back with the same issues.

Also, would this invalidate my home buyers report done by the valuer if I chose not to go with them? This has been dragging on for 2 months and we are no further on in the process. I know the simplest option would be to walk away but there is nothing else on the market and I do love the house, plus I'm wasting money on rent and dont want to start this process again with another house. I really want to be in before Xmas but looking like it will all fall through over a bloody sunroom.

Has anyone ever been in this position before and are there any other options I have to resolve this? I'm so stressed out and have wasted money I cant afford to waste. I feel the valuer is being difficult too. Why can't they just value it at asking price minus the £5k work?

Thankyou for all of your advice so far. The house hasn't been repossessed yet and is being sold at market value, so no huge savings really. I don't really understand where they are in that process as there is a 3rd party involved (Im assuming the repossession company) but they still appear to have control of the sale and there is no time limit on the sale going through etc. (I actually wish there was).

Other than the sunroom and damp in the basement, the house is in good condition although it does need abit of modernising (think 1980's bathroom with carpet!!). I think it's good value for size/condition/area and I do have enough money to do some improvements and repairs.

This may be naive of me but I don't think the vendors would trash the house. They are a lovely older couple who raised their DC there who are now adults and they have had health problems which probably led to financial difficulties because they ran their own business. They have also offered to leave me lots of good quality furniture and when I went for a second viewing recently, they were packing up their stuff. There just doesn't seem to be any urgency or compromise but I guess if they cannot afford to do the repairs then they cannot afford them and the estate agent is really slow at getting back to me so I'm not sure who is holding things up. The vendor did give me their direct number. Should i bypass the estate agents and contact them directly or is that opening up a can of worms?

What's really frustrating me is the £0 valuation. It means that only a cash buyer can purchase the house and I'm also concerned that if I get a second valuation with a different mortgage company then it invalidates the home buyers report.

I know walking away sounds like the easiest option but my living situation now isn't great. The house is too small and in a rough area (direct neighbour's are drug dealers) and the rent is more than the mortgage would be. Older DC (teens) have essentially moved in with my parents because they hate where we live and have to share bedrooms so my parents are understandably fed up. This is the first house my DC have seen where they all liked it and have enough space for a double room each. It's hard to find a 4 bed with 4 decent sized rooms and in my budget and area.

I'm so stressed out by all of this.

In the past I've obtained informal advice from a local, independent surveyor when a property has been deemed unmortgageable. Perhaps you could do the same for a second opinion?

As in, they may be able to advise on a particular mortgage company or way to proceed

Could you talk to other mortgage companies and sound them out about whether they would lend on the basis of what you already know. They might give you an informal answer which would let you know whether it's worth ploughing any more money into this. In the end, if you can't get a mortgage on it, then it's out of your hands.

Another thing is I'm desperate to reduce my hours at work. I have a 3 hour commute and middle DC has ASD and is school refusing. I need my current income to get the mortgage but could afford to reduce my hours once moved in which would make life easier. The longer this drags on, the longer I have to keep up the impossible situation I'm living in.

Finding another house could take months.

I can't believe the lender hasn't got room for manoeuvre on this. The EA really should be doing this negotiating for you. They can speak to all parties concerned. I would make yourself a pest with them. The more you ring the keener they will be to get you off their backs. It's not fair, but complainers do get prioritised.

Can your solicitors talk to the mortgage company about offering a mortgage on condition that they retain the cost of the works until you can demonstrate proof that they've been done? You'd also need to negotiate with the vendor to accept that, but it doesn't sound like thety're in a position to quibble.

The £0 valuation is for a mortgage, if you’re a cash buyer it would be market value. Another mortgage valuation would probably come back the same.
If it’s an older couple they may have ‘sold’ to an equity release firm a few years ago and they may be the 3rd party.
I would say this is t the house for you don’t throw your precious savings on this keep them for a house that you can purchase.
The estate agents should only be advertising this house for cash buyers only if it’s unmortgageable.

@Compendiumoffluff I am going to be really honest here.

We bought a house which was unmodernised and it has been an absolute money drain. If you think that they haven't bothered taking off the 80s carpet or decorating (relatively cheap), think of how little else they have done. We've had to buy a whole new central heating system, new boiler, new window and back door, new carpets - it has cost us a FORTUNE. The heating alone was £12k the first week we moved in. We had to have an emergency replacement fuse box when our baby was a few weeks old. The plaster is crumbling, stairs are broken.

We found woodworm, rats nests in the garden, a ceiling fell through... it has been unbelievably stressful.

Just to buck the trend, we purchased a repossession, it was pretty quick and easy. And now we have a beautiful house and a tiny mortgage

I would cut your losses and change mortgage provider. We are with Leeds. We had similar problems buying our house, and they just wanted to put a £5k retainer on the mortgage, but we managed to negotiate and didn't have the retainer in the end.

Also, beware of rouge damp/timber surveyors. Ours identified damp in our 180 year stone cottage 300m up on the west facing side of a Welsh mountain, NO SHIT! He also quoted nearly £5k of work to the single skin, no Foundation porch, apparently it was the "Rolls Royce" of damp proofing (the most expensive similar product we could find online was about a 10th of the price). They then back you in to a corner as to get the mortgage retainer released you have to get a registered timber/damp surveyor to sign the work off. I'm pretty sure we could have rebuilt the porch for less!!

When applying for the mortgage make sure you state clearly that you intend to pull the sunroom down. Then I think a lot of mortgage companies will ignore any work less than £5k that needs doing.

Talk to a broker, advice only. Mortgage may change to interest only later, but then you will be in difficulty eventually

TBH I'd walk away. We cut our losses on a purchase that went nowhere for very similar reasons. We had a fantastic mortgage broker who said that in their experience, lenders almost never back down on valuation/survey findings so it's not worth the money and stress unless you absolutely HAVE to buy the property.

If you are desperate, then go to a mortgage broker (L&C are very good and are free for you to use as they are paid by the lender) and explain the situation to them. They will know which markets to go to where you have more chance of getting a common sense decision. TBF it's not the valuation agent's fault - they are bound by the lenders T&C, so what you need is a new lender with a different set of criteria.

Walk away OP. The issue is the vendors not getting work done in order to sell. If house is repossessed it will be sold for lower price at auction. No mortgage company will lend on house that has structural issues. At auction they have cash buyers. YOu have already wasted money on survey save yourself further distress by finding another house to buy.

Hmm. Do they definitely want invoices rather than receipts? If so can you book someone to do the work after the expected completion date and get them to invoice for it with an agreement to pay later/ cancel if sale falls through?

A house we wanted to buy was valued at £1, did the full survey, was valued at £0. It does happen. We couldn't find a way around it and two years later the house is still for sale and has even go for auction. It never goes through.
My concern for you is it would end up being a money pit. As sad as it is walk away

There just doesn't seem to be any urgency or compromise but I guess if they cannot afford to do the repairs then they cannot afford them and the estate agent is really slow at getting back to me so I'm not sure who is holding things up. The vendor did give me their direct number. Should i bypass the estate agents and contact them directly or is that opening up a can of worms?

Call them and find out EXACTLY what their situation is.

If the estate agent is poor at communicating with you, they are possibly also poor at communicating with them.

If they have adult children perhaps they have options.

Be crystal clear - if they do the work you are KEEN to buy. If they don’t, you have no choice but to walk away and then any other sale will have the same issues.

I hadn't considered the 3rd party being an equity release scheme but I guess it would make more sense as it isn't a typical repossession.

I have an excellent mortgage broker who has been really good so far. He's the one who advised going with a different lender and getting a valuation only (and not mention the other stuff picked up in the home buyers survey). The house doesnt have structural problems, it is only the sunroom which was added in 2008 and can be easily knocked down.

The house isn't completely unmodernised, it's more cosmetic modernisation it needs but I know there could be more issues down the line. It has double glazing, the boiler was replaced in 2008 and they have modern central heating put in at the same time. They added a balcony extension at the same time as the sunroom which is fine structurally and converted the basement with damp proofing. The carpets are in good condition but the kitchen could do with some new doors/painting and definitely a new bathroom. They added an ensuite to the main bedroom about 15 years ago which is ugly but livable with. There are some ceiling tiles which need to come down and airtexing on some of the ceilings so I would have to test for asbestos and a few other minor issues. The house is 200 years old so the damp report in the basement didnt surprise me and I could probably get a cheaper quote if I looked around.

I do have about 30k I could spend on repairs etc but don't want it to be a money sink. What I'm struggling with is that I will be taking the same gamble of unknown issues with any house I buy.

I'm going to ring the vendor directly now. I just need to know either way!!

Would the vendors just knock down the sun room as that seems to be the sticking point?

When we were buying our current house, the survey showed a problem with the roof as it needed more supports. They put a retention on the mortgage which meant they wouldn’t pay at all until the work was done. We would have been happy to reduce the offer and do it ourselves but the mortgage company said no.

Do the current owners have any fit / healthy friends who could take the thing down? I don’t understand why it’s quoted as a £2k job (maybe disposal costs are high?)

So I spoke to the vendor and they confirmed they have no money to do the work. They are filing for bankruptcy and mentioned that the repossession company are now giving them 30 days to leave so it does look like it's a full blown repossession now. They mentioned something about refusing eviction and having to make a decision today or tomorrow so this is not looking good. They also said they are making no money from the sale and reducing the price is out of their hands.

I've asked my solicitor to speak to the valuer as they seemed to think some sort of arrangement could be made.

I haven't had a quote for the sun room, I was just estimating worst case scenario for it to be knocked down. The vendor has asked for quotes for this and will get back to me and I've also asked for a quote based in the reports.

What a nightmare this is turning into!!!

But it's not a nightmare if you walk away - it's someone else's problem then.

Think of all the disruption and issues you'd face if you are this stressed and with such a busy family life before you've even bought it.

Honestly this is not the house for you. I know it’s gutting but it wasn’t even cheap.

Good luck finding the one. I’m sorry this isn’t it.

Walk away.....fast.