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buildings insurance and re-instate value

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hi all,


I purchased a property in 2007 for £105000 which is now in negative equity. More recently properties of the same kind on the street have been sold averaging £80000. The lender had carried out 2 valuations over a period of six months when the original mortgage was taken out. The first valuation report hadthe reinstate value of £87000 and the second at £92500. Recently i been advised the lender is to renew the insurance policy and that sum insured would be £107000.


I opposed this figure and told the lender that their original reinstate valuation is wrong and was overvalued to reflect the house price market of the time and believe the reinstate value is approx £70000.


I received a letter from the lender stating they inputted the wrong reinstate value at the time of completion and a more upto date reinstate figure is £105000. I called and spoke to their agent who told me that the letter is wrong and no incorrect reinstate value was input on completion but the reinstate value had been indexed linked twice giving the incorrect figure of £107000 rather than £105000. The agent confirmed what was in the letter andwhat she told me was contradictory.


Now i have two issues which i need some helpful advice


(1) if a property has a sale value of £80000 is it a fair understanding for the reinstate value to be £105000.


Is the sale of the property reflective of the cost to rebuild the property?


Is the rebuild cost not a factor determining the cost of sale?


in other words are properties sold less than the actual cost of its building even when condition is good?


(2) The lenders agent was unable to give me further information on the indexed linked figure for me to determine the difference and any over charging on my account. As their is contradictory information but an agreement to some error on their behalf does that equate to a breach and what actions should/can i take?


anyone had any experience with their lender with regards to over valuation?

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i have always found the rebuild value to always be considerably more than the sale value.


also it varies upon how the rebuild takes place


and what materials are used compared to the original construct materials


mines 30" stone [1700's build]


thats about £500k to do so my building ins reflects that


the value of the house on the market is about £300k




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