Jump to content
House Price Crash Forum
Sign in to follow this  
FingerTheCulprit

Undervaluation In South Wales - Anyone Else?

Recommended Posts

My wife and I have been renting for over 10 years now and we are into our 30s.

We’ve been continuing to frugally manage our finances and finally in a position to lay down a 10% deposit (£20k) on a house... but....we’ve just been undervalued by £25k on a £215k house. So, we're locked out once again.

I wonder whether any one else has been undervalued on their purchase property? Is this something first time buyers often experience?

I've put some more details on my blog if you are interested....

http://******/ZrthnR

Share this post


Link to post
Share on other sites

A poster called the masked tulip has reported this in swansea.

No offence but 215k is a lot for a house in Wales. If it has taken so long to accumulate a 10% deposit, might you be aiming too high?

Share this post


Link to post
Share on other sites

Or could it be ........... you were prepared to pay £25k over the odds for a house and someone has saved you from the negative equity problem. He's also saved me and every other taxpayer in the land yet more expense when the bank who would have given you a mortgage gets bailed out. Again.

You should send the surveryor a thankyou card and a box of chocks.

By the way, if continuing to frugally manage your finances has helped you to scrape up a meagre 10% deposit on a modest house, you might like to think about being ultra cautious in buying a house, 'cos it sounds like you might be at risk if there is an interest rate rise or when we get the fall in property prices that the market is currently defying.

.

Edited by Stainless Sam

Share this post


Link to post
Share on other sites

Sounds like the OP simply has offered way too much for a house and the surveyor or bank has merely laughed at the ludocrous asking price from the EA/seller.

Sorry if that sounds harsh but there is a lot of ludicrous asking prices coming on the market now - completely out of control in my opinion.

Why are you complaining? The bank have saved you from paying way over the odds for a house. It is the EA and seller who have to get realistic now. Surely you have used this to get the house for a much lower price?

Share this post


Link to post
Share on other sites

To be frank I'd say most houses in South Wales are being over valued at the moment - by at least 10% in Cardiff.

Using Property Bees I'll seen SO many house sales fall through recently and you can see that the reason was that they were just overpriced (or in other words the buyer didn't put in the appropriate below asking price offer).

Rightmove + Property Bee + Rightmove's "Recently sold nearby" tool = what's REALLY going on with house prices.

Share this post


Link to post
Share on other sites

Hi everybody, in order of appearance:

@long time lurking: did we think it was overpriced? Yes we did ask ourselves that question, many times. We thought at worse it would be £5k-£10k overpriced.

@SeeYouNextTuesday: I agree it does sound like a lot for a house in Wales, but we have a long list of ‘wants/needs’ which haven’t been met by other houses so far. I travel all over south Wales for work, so I need to be able to get into Cardiff, Swansea and Newport. My wife needs to get to the heads of the Valleys. I also need to be close to a train station because I can’t park in Cardiff.

My wife has to do all her non visit work from home so, she needs an office and so do I for the same reason.

As I’ve said we’re in our 30s and have been renting for over ten years. Houses are not selling at the moment so we don’t want to have to ‘step-up’ in a few years time and in honesty I’ve been reading forums like this one for years and would agree with many people when they say ‘the ladder concept’ has probably gone by the wayside. So we want to buy once for the rest of our lives of for at least 5-10 years.

The house is detached, near a train station and close enough to Cardiff. Has an attic that’s ready to convert into another 2-3 rooms for our offices in the future.

I can imagine what a number of people are thinking and I probably would have thought the same a couple of years ago. But we’ve been saving for ages, not seen any houses that tick the boxes. The only ones that do get sold in days and we don’t even get to view it.

Whilst you may think they’re over-priced the reality is, the houses that have potential usually are more expensive than the others. Like I said, I think realistically, when I objectively look at it the house it could potentially be £5k-£10k overpriced, but there aren’t any others with the same specification.

Two years ago, when we went to the bank(s) to ask what we needed for a mortgage we needed a 20% deposit and rates were about 6.5%. In the last year they’ve dropped rates like a stone and now we can get a 4.2% rate against a 10% deposit. So we have been aiming for a bigger deposit for a long time, but now we are lucky enough to get a more expensive home and not have to fork out £5k+ in fees to move in 4 or so years time when we outgrow a smaller house. The repayments are about a £1000 per month, we can afford that, and still save enough for rainy day or a rate increase if it does happen (as an aside, prediction: 3+ years!).

@Stainless Sam re: negative equity. Well as I have said, it shouldn’t be that undervalued. Besides, we wouldn’t be planning to move so negative equity wouldn’t be our biggest concern. Supposing the valuer isn’t a complete douche (which he almost certainly is), in the first 3 years we would have paid the £25k undervaluation in rent, so its swings and roundabouts to us.

Trust me, the taxpayer would not be involved. I’ve not reneged on any debt and don’t plan to do so.

Frugally managing finances yes. Getting married and other things in life cost money though. Plus we’ve been lots of rent in the meantime!

As an aside, we went to a Redrow development. They’re willing to give us a £240k mortgage on a house that I most certainly agree is not worth £240k. Overvalued for sure! But they tell us they have a financial adviser who knows which banks to go to for particular surveyors who will give the right outcome.

Doesn’t sound fair to us. Which is why I wanted to know if anyone else has had the problem and knows which bank will give an accurate valuation, i.e. not ridiculously undervalued beyond reality.

@The Masked Tulip : what does OP mean? I’ve kind of made my points above in response to your comments. You’re not obliged to agree with me I can live with that. SeeYouNextTuesday mentioned you had posted about undervaluations before. It would be useful to hear more on that if you could?

We went back to the estate agent, they went to the vendor. He wouldn’t budge at all and re-listed the house straightaway.

That’s part of the problem with the market. People aren’t being forced to sell. The vendor is a developer/‘investor’, I quote “his money wouldn’t do anything for him in a bank, so he’d rather wait for the market to improve”. Cretyn I know, and he’ll be waiting for a long time.

@Bankside: yes we’ve challenged the valuation (complaint with Countrywide in progress) and went back to the vendor - he didn’t budge.

@olde guto: maybe houses are overvalued, but other people appear to be paying these prices, so arguably not (lots of STCs on Rightmove). I used to think the same as you. We’ve been using property bee for sure.

We wouldn’t want to buy this house anyway because of the attitude of the estate agent and vendor.

However, we definitely don’t want to get an undervaluation again when it’s not deserved. It costs us money, time, credit record checks, effort and soul and I’m running out of all!

Like I said, I’ve been reading this forum for years, but perhaps this is not the right place to get some help with my question on reflection.

Thanks for your time nonetheless,

FingerTheCulprit.

Share this post


Link to post
Share on other sites

What you have to remember is that an EA and a seller can put any ludicrous asking price on a property that they like - there is no legal recourse to them. If some mug is willing to come along and pay the silly price then the seller walks off with loads of cash and the EA gets a fat commission.

EAs, for a variety of reasons, can hugely ramp up the price of not just an individual house but of houses in an entire suburb, town or city. They simply add tens of thousands to an asking price - sometimes even hundreds of thousands.

Chartered Surveyors, on the other hand, are legally responsible for their valuations and can be sued - as many are now being - over over-valuing properties. Of course, the problem comes when some EAs are also surveyors but, generally, surveyors will be more realistic than EAs with valuations.

You need to forget this house now. Let the seller sit there thinking the house is worth the asking price and go find someone who needs to sell.

Read more of this site and think long and hard about the kind of offers you make on a house next time. Best of luck.

Share this post


Link to post
Share on other sites

Thanks for the response The Masked Tulip.

Our solicitor said the same thing re: surveyors being sued over the boom/bubble years. Again it seems unfair again that we, as with a number of other people, continue to be stuck somewhere in the middle trying to mediate between one side: seller and estate agent's high expectations and on the other the risk adverse expectations of a surveyor to no avail. Isn't that supposed to be the job of the estate agent, what do they do for their money!?

I'll keep reading, all the best.

Share this post


Link to post
Share on other sites

Thanks for the response The Masked Tulip.

Our solicitor said the same thing re: surveyors being sued over the boom/bubble years. Again it seems unfair again that we, as with a number of other people, continue to be stuck somewhere in the middle trying to mediate between one side: seller and estate agent's high expectations and on the other the risk adverse expectations of a surveyor to no avail. Isn't that supposed to be the job of the estate agent, what do they do for their money!?

I'll keep reading, all the best.

Yes, it is supposed to be the agent's job but I have come across so many completely lazy EAs that I am nothing short of disgusted with them. I have heard so many stories of certain ones doing everything from not turning up for viewings through to not passing on offers it is simply scandalous.

The entire EA industry needs to be regulated with punitive fines falling on EAs - sadly this will not happen.

At the end of the day EAs are sales-people who make money on commission so they want to sell the house for the highest sum possible. They are not on the buyer's side and, arguably, not on the seller's side. They are on their OWN side IMPO.

In my part of thre world there is ramping of prices, IMPO, of almost the entire West of Swansea. Certain EAs ramp up the asking prices and suddenly you wake up one day and the prices of some houses have gone up by 50K, others by 100K, etc, and they just sit there, arrogantly IMPO, just waiting for people desperate to buy.

If they ramp an entire area then individually ludicrously asking priced houses do not look so out of place. The EAs ramp and, IMPO, they know that some poor sods will end up trying to buy such houses... and higher prices means bigger, fatter fees for the EAs.

Thankfully the banks are not, yet, lending on such ludicrous asking prices and that surveyors are scared stiff of being sued. In Swansea West now, IMPO, hundreds of houses have had their asking prices ramped beyond what most people can afford. It seems like most of Swansea West is now dependent on Londoners selling up and wanting to buy in Swansea... which kind of ignores all the Londoners trying to sell their Swansea West homes already.

Nothing will change until interest rates rise and until EAs face criminal charges for their asking prices IMPO.

There were a few surveyors found guilty in North Wales last week with regard to fraud and house pricing. I think they are being sentenced in September.

http://www.bbc.co.uk/news/uk-wales-22819018

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 245 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.