The recovery of the UK housing market is being hampered it seems by over cautious valuations being made by mortgage lenders causing house sales to then fall through. The trend has come to light from the estate agents body the National Association of Estate Agents (NAEA.)
The differences between agreed sales prices and then the property valuation for by mortgage company surveyors can be up to 10% a huge amount for a buyer to find in today’s market. The discrepancy then leads to the sale falling through.
According to research conducted by the NAEA as much as 10 per cent with a large majority (69 per cent) of agents experience problems with lenders’ valuations after a sale is already agreed.
65 per cent of those who took part in the poll of UK agents said that property sales had fallen through as a result of down valuations.
Peter Bolton King, chief executive of the NAEA, said: “Our members have heard in several cases that lenders gave specific instructions to their valuers as to how they should approach these valuations.
“Undervaluing properties creates the knock-on effect of sellers having to drop prices and those homeowners who are looking to re-mortgage their property being left with little room for manoeuvre. “Whilst I understand that lenders are operating under severe constraints, it is neither fair nor ethical for valuations to be lowered on the basis that it might reduce exposure to competitive loan rates,” explained Mr Bolton-King.
In related news The Private property sales website the House Shop launched a new property valuation service to allow private sellers to make more accurate judgments about the values of their homes. The service, which is aimed at both buyers and sellers, it will allow private individuals access to a system currently used by professionals.
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