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colonel faulkner

Very Surprising Surveyor Valuation

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Just got off the phone with a friend who has bought off plan from abrand new flat development in the centre of Cardiff. I was absolutely amazed, but have no reason to think they're making this up:

Agreed to pay full asking price with developer, 3 bed flat, 300K.

Surveyor valuation = 225K!!!!

Mate has said he will have to abandon the purchase, as he cannot get a mortgage based on this valuation.

I am pretty surprised at this.....5-10K maybe, but 75K???????

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Just got off the phone with a friend who has bought off plan from abrand new flat development in the centre of Cardiff. I was absolutely amazed, but have no reason to think they're making this up:

Agreed to pay full asking price with developer, 3 bed flat, 300K.

Surveyor valuation = 225K!!!!

Mate has said he will have to abandon the purchase, as he cannot get a mortgage based on this valuation.

I am pretty surprised at this.....5-10K maybe, but 75K???????

This will affect MEW too for certain properties. .I would have thought you still needed a survey valuation for MEW ?

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Just got off the phone with a friend who has bought off plan from abrand new flat development in the centre of Cardiff. I was absolutely amazed, but have no reason to think they're making this up:

Agreed to pay full asking price with developer, 3 bed flat, 300K.

Surveyor valuation = 225K!!!!

Mate has said he will have to abandon the purchase, as he cannot get a mortgage based on this valuation.

I am pretty surprised at this.....5-10K maybe, but 75K???????

I'm shocked, shocked, to hear that there may have been appraisal fraud going on!

Two years from now everyone will be saying 'Who knew there was so much fraud and corruption in real estate? There was nothing to be done.' When it was patently obvious it was going on.

I have to say though I expect it to be much less severe in the UK than the US since surveyors are actually regulated in a reasonable way whereas appraisers in the US stop getting business if they don't 'hit the target'.

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This doesn't surprise me at all, for two reasons...

1: Some time ago I read about a couple who paid a £50K deposit to buy a very expensive London apartment off-plan. When the development was complete they applied for a mortgage for the balance but the lender argued that the apartment was worth nowhere near the off-plan price and wouldn't lend them what they needed. They lost their deposit.

2: Last year I looked st some two-bed apartments which were being offered off-plan at £164,950. I thought they were overpriced and I was right. They're now complete and being offered for sale at £124,950. Nothing is shifting so the developer is also offering them for rent.

Buying off-plan used to work because house prices were rising. However, house prices are no longer rising, except in people's imaginations.

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Just got off the phone with a friend who has bought off plan from abrand new flat development in the centre of Cardiff. I was absolutely amazed, but have no reason to think they're making this up:

Agreed to pay full asking price with developer, 3 bed flat, 300K.

Surveyor valuation = 225K!!!!

Mate has said he will have to abandon the purchase, as he cannot get a mortgage based on this valuation.

I am pretty surprised at this.....5-10K maybe, but 75K???????

Who on earth ever agrees to pay full asking price!?

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Guest donall

Sounds like someone sprinting to catch up with the band wagon

I'd like to know what the person who bought that flat was thinking. Something like "With prices rising - this flat is the best purchase ever - I am so smart"

It is worrying especially since there are lots of places in Cardiff which can be got for much much less than 300k (assuming that it is some sort of 2/3 bed flat)

Also, can someone explain MEW for me? -

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As has been discussed in here many times, the value of theses kind of properties is out of sync with the rest of the market.

They're at least a third overvalued relative to family houses...

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Also, can someone explain MEW for me? -

MEW = Mortgage Equity Withdrawl.

Basically you remortgage to withdraw money

You have a 200K house, with a 140K mortgage. If you need 40K for something that isn't related to improving your home (car/holiday etc)

you can remortgage to 180K - and take cash sum - MEW!!!!

Obviously the issues with this, is if the house price drops to 160K, for example, the "owner" is then in negative equity!!!

Edited by OzzMosiz

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MEW = Mortgage Equity Withdrawl.

Basically you remortgage to withdraw money

You have a 200K house, with a 140K mortgage. If you need 40K for something that isn't related to improving your home (car/holiday etc)

you can remortgage to 180K - and take cash sum - MEW!!!!

Obviously the issues with this, is if the house price drops to 160K, for example, the "owner" is then in negative equity!!!

I don't get why it is called 'equity withdrawal' , when really it is just upping your mortgage. Or have I missed something? I've never understood why people do it really, and I think I have a mental block about it.

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Just got off the phone with a friend who has bought off plan from abrand new flat development in the centre of Cardiff. I was absolutely amazed, but have no reason to think they're making this up:

Agreed to pay full asking price with developer, 3 bed flat, 300K.

Surveyor valuation = 225K!!!!

Mate has said he will have to abandon the purchase, as he cannot get a mortgage based on this valuation.

I am pretty surprised at this.....5-10K maybe, but 75K???????

Ahh lovely Cardiff.

Most expensive place to live in the UK. Where the average person spends 97% of their take home pay on mortgages and bills.

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Guest X-QUORK

We're moving to another rental property this week after our landlady accepted an offer on our current address, all a bit of a pain, but the village we're moving to is very nice and much closer to work so we're not overly fussed.

Anyway, the purchaser's survey was carried out last Thursday by a friendly enough chap who, during a bit of chit-chat, volunteered the little gem that in the current housing market we were very wise to have STRed! :D

Whilst we're still confident that STRing last summer was a good move, it's very nice to hear it from a property professional.

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The same thing has happened with a development in Birmingham. The price of new flats will have to come down if surveyors stick to their guns. Don't forget that the surveyors indemnity insurance is on the line if he overvalues and it's this that should keep a lid on the silly prices. The really worrying thing is that buyers of new flats are still offering asking price. I see it again and again with developers I act for. The owner occupier offers asking price and the investor buys for 15% less

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I don't get why it is called 'equity withdrawal' , when really it is just upping your mortgage. Or have I missed something? I've never understood why people do it really, and I think I have a mental block about it.

spin, I guess. In olden times (ten years plus, positively ancient in the context of modern society's goldfish-like memory) it used to be called "second mortgage" and was regarded as something almost shameful.

Now it's "equity release" and is the sexy, adventurous thing that go-getters and high-achievers do when they want to improve their lot.

I says a lot about contemporary attitudes to debt.

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Guest donall

Thanks for the MEWing.

I think that to MEW today would be suicide but a couple of years ago i would have probably MEWed to BTL - but i ws still in Uni and not on the ladder.

The ads for MEW are interesting - and all forms of these "one low interest loan"

As for flats being overvalued relative to "family" homes - I agree.

In the last HPC it was flats and apartments that lost the most value.

Add-on the fact that these city centre flats are generally removed from a lot of local amenties (i.e. maybe 10 minutes walk to the nearest anything, while in the suburbs you are 5 minutes drive from everything) and that you generally get to hear everyone else's parties - these are probably going to suffer most in a downturn.

I was coincidentally going to work in cardiff and felt that the apartments by the bay were nice but over-valued and would have prefared living in the city (Roath perhaps)

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As has been discussed in here many times, the value of theses kind of properties is out of sync with the rest of the market.

They're at least a third overvalued relative to family houses...

...which are themselves 50% overvalued relative to cash.

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I had a bet with 3 people after the Community Shield. I bet £20/£20 and £5 with 3 people that the average house price would be lower in 12 months time. they started off at a £5 and then 2 upped it to £20. The halifax was the index I chose and it was £177,075 (July 06)

i think. So in 12 months time am I going to be richer or poorer??????

TB

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The same thing has happened with a development in Birmingham. The price of new flats will have to come down if surveyors stick to their guns. Don't forget that the surveyors indemnity insurance is on the line if he overvalues and it's this that should keep a lid on the silly prices. The really worrying thing is that buyers of new flats are still offering asking price. I see it again and again with developers I act for. The owner occupier offers asking price and the investor buys for 15% less

Shock! Horror! The investor buys for 15% less - so he has a good hedge against falls then.

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This is interesting. Back in 1994 at the botton of the market I tried to buy a house. I knocked about 10% off the already low asking price and was convinced I was getting fair value. But the surveyors knocked another 10% off, and in the end I was unable to negotiate the seller down further. But the reason the surveyors did that was they had come in for a lot of critisism over their valuations in 1998 boom period, due to the subsequent negative equity, and were being extra cautious still; despite the fact that the market was at the bottom ( well in my opinion at the time- which either because I am good at reading the property market or else by serendipity turned out to be correct ;) ).

My view is the surveyors have learned from their mistakes last time, have seen the market reaching its top in the last months and are building their expected market drop over the next couple of years into their valuations now. Indeed it may be this that is going to trigger a crash instead of continued stagnation.

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10% off the price of a house in 1994 would bring it down to 27pence wouldn't it?

Houses were soooo cheap then weren't they? Friend of mine's dad almost went through the roof when he offered the asking price on his first house. It was £45k for a lovely terrace in Pershore, Worcs. His dad said "Its worth £43 and a half thousand you idiot!"!

And in 10 years that house was £145 thousand. Not right is it? Or safe. Has a sort of 'built on sand' feel to it.

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  • 301 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%



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