Issue with mortgage valuation on new build property
Do new build houses lose value UK?
New build premium pricing
Just like a new car, a new build house or flat will depreciate in price the minute you turn the key in the door. Even in a rising property market, you may not get your money back when you buy a new build home if you have to sell within a year or two.
What does it mean if the valuation has been instructed?
This is a document confirming that the lender will provisionally lend a set amount of money for a mortgage providing that further checks, which may include a property valuation are completed and are satisfactory to the lender.
Is the valuation the last part of the mortgage?
After the valuation, if the lender is satisfied with the value and condition of the property, a mortgage offer may be made. When this offer will be made is entirely dependent on the mortgage lender. Some lenders may choose to carefully examine the report.
Are new builds overpriced UK?
Are new builds more expensive? Yes. According to 2019 data from the Land Registry, the average price of a new build is 29% greater than existing housing. The average price of regular housing was £224,729 whilst new builds were £290,176.
Are new build mortgages different?
Mortgage lender criteria is stricter for new-builds
You may find that you’re charged a higher interest rate for a mortgage on a new-build property. This is because lenders see these mortgages as riskier, due to the possibility that the value of the property may fall in its early years.
Are new builds harder to sell?
Despite new build homes being newly constructed and built with highly regulated and energy-efficient materials, they can depreciate in value very quickly and also be very difficult to resell. This is important to a lender as if they have to repossess, they need to be able to make their money back from the loan.
At what stage is a mortgage valuation done?
Once the mortgage lender’s underwriter has received a copy of your completed survey, they will be checking to see if the valuation makes sense and that there are no issues with the property highlighted in the report. From start to finish, the entire valuation process takes around 2 weeks to complete on average.
How long does it take for mortgage approval after valuation?
Get a mortgage offer Most banks will issue a mortgage offer within a few days of receiving your property valuation report – as long as they have all the other necessary information. It can take around five days to receive the report, so the time between valuation and mortgage offer is typically one week.
How long does it take for a mortgage valuation to come back?
2-4 weeks
How long from valuation to mortgage offer? Most of us can expect to wait 2-4 weeks from mortgage application to mortgage offer. From the point of the mortgage valuation to mortgage offer usually takes a few days to more than a week depending on how busy the lender’s surveyors are.
Why you shouldn’t buy a new build?
Typically new builds go down in price after you buy them, a bit like a car. This is because new builds have the premium price tag that’s out of character for the area, so they come down before they go up – meaning it can take a while to start seeing any equity in your property.
Can you negotiate on a new build?
Always negotiate a new-build house price
Just because a new-build property is new, it doesn’t mean the asking price is non-negotiable. You can make an offer in the same way you would if you were buying an older property. Of course, it’s up to the developer if they wish to accept a lower offer or politely decline it.
How much do new build homes increase in value?
The new build ‘price premium’ has been well established by the press, with buyers often paying up to 15% more for a new build property. The higher price is often justified because of the lower running costs that come with a new home.
Why is it difficult to get a mortgage on a new build?
Nearly all house builders require buyers to Exchange Contracts within 28 days of reserving a new home. The demands of this tight deadline (forced on buyers by house builders) is often difficult for lenders, so it pays to get a mortgage offer agreed ‘in principle’ before even going to developments.
Can you get a 90% mortgage on a new build?
There are few lenders who offer 90% LTV mortgages on new builds than on existing properties. New builds are often more expensive as lenders see them as a bigger risk to lend against. This is because they do not have a history. Around 20 lenders currently offer 90% LTV mortgage products on new build houses.
Can I get a 95 mortgage on a new build?
A 95% mortgage can be used to buy a new-build property and many developers promote this knowledge to help first-time buyers and those looking to buy a brand new home.
Are 5% mortgages available on new builds?
MAJOR lenders are refusing to offer 95% mortgages on new build homes under the government’s loan guarantee scheme. The government launched the scheme for wannabe homeowners with a 5% deposit earlier this week to help them get on the property ladder.
Can you get 5% deposit on new builds?
You’ll need a minimum of 5% deposit to qualify. It’s available to first-time buyers purchasing a single property who do not currently own a property in or outside of the UK only.
How much deposit do you need to put down on a new build?
Stricter lending for new build mortgages
Nationwide, for example, will offer a maximum 75% LTV on new build flats (meaning you’ll have to find a 25% deposit) but up to 85% for new build houses (and leaving you to find a 15% deposit). But this differs according to lenders.
Why is there a 15% deposit on a new build?
Under Deposit Unlock, the housebuilders will pay to insure the mortgages, instead of the lenders – using a portion of the money they get from selling the homes to do so. The theory is that this will make lenders more comfortable mortgaging new-builds.
How do mortgages work when buying a new house?
A mortgage is essentially a loan to help you buy a property. You’ll usually need to put down a deposit for at least 5% of the property value, and a mortgage allows you to borrow the rest from a lender. You’ll then pay back what you owe monthly, generally over a period of many years.