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Help to Buy Valuation report rejected

3 replies

Anavrin00 · 26/02/2024 12:43

Hi all,

Has anyone had their RICS valuation report rejected by the Help to Buy/ Target/ Homes England (Lenvi) team for dropping too much in value?

Our new build London property was bought in 2020 for about 400k and I'm sure we overpaid as young first time buyers aswell as on the new build premium! And now with interest rates super high, 2bed flats in our area have been sold at about 50-75k less now.

We want to do a new house purchase so got it valued and found it to be about 340k. Obviously this means the govt gets less back and this has now been passed to the "legal team".

Has this happened to anyone else and what was the outcome?
We put an offer on our dream house and so scared this will delay things and affect the property purchase!

Any advice would be appreciated - thanks!

OP posts:
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XVGN · 27/02/2024 07:35

It seems to be a complicated subject. Have they actually rejected the valuation or do you just fear that they will? How much of the loss would be from your own deposit versus the government scheme?

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Anavrin00 · 27/02/2024 08:24

@XVGN thanks for replying.
Yes, it's the fear to be honest. But also bcs there's no time frame for the response which seems absurd! It would mean paying for new valuation reports, mortgage offers etc if they took their time with it & those expired.
It wouldn't be a loss from our deposit. The idea is that the govt gets 40% of the sale price or valuation amount if you re-mortgage to pay the loan back (like we are).

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usertaken · 27/02/2024 08:45

I had a friend where theirs had fallen but it went through anyway, but it was a smaller amount % wise.

Think of it from their point of view, it's their flat as well, if you get 10 different valuers around you might get 10 different values with a relatively large range.

So it might set a bad precedent to allow someone to sell automatically just because one valuation says so.

If there are flats on sale for £375k why should they let you out at £340k because one valuer said so? They might take the view that you're not trying hard enough to sell what is their asset as well.

Your ownward plans are not really any of their concern.

But if prices go down, you share in the loss with the taxpayer, your equity in the flat reduces as well. If you put £50k in for a £240k mortage and the rest HTB, the HTB bit reduces to £128k assuming 20% loss. But then there is only £320k to redeem everything. That leaves £192k to pay off the mortgage, which wipes out the deposit (I have ignored the effect of repayments and costs for simplicity sake), so the final redemption figure would be less than the £50k originally put in.

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