Over-cautious property valuations are placing dozens of potential Shropshire house sales at risk, it has been claimed by property experts.
Sales and remortgage deals are being thwarted because surveyors are “playing safe” by placing a lower valuation on people’s homes due to the current housing market slowdown, according to the experts.
Estate agents across the country report instances of buyers and sellers agreeing a price, only for a valuer to come along and chip another five or 10 per cent off the agreed figure.
With mortgage advances already being cut back as a percentage of the house price, to reduce risk for banks and building societies, this further cut can be enough in many cases to sink sales agreed.
Henry Pryor, from property firm Primemove.com, said: “Once you agree a sale, be ready for the valuer who comes round to sign off the value for the buyer’s mortgage company.
“In a hard or falling market, many surveyors will err on the side of caution and down-value, just to be safe. The problem is that lenders only lend on this lower value, and a buyer may not be able or willing to raise the difference in cash.
“On an average family house possibly advertised last autumn at £230,000 to £240,000, buyers and sellers might agree a deal at £210,000 to £220,000 to take account of market falls so far, and falls possible in the rest of 2008.
“However, the valuer who makes £210,000 his maximum might force the buyer to find another £10,000 somewhere out of their resources, unless they can extract a higher price from a previous property.”
So can over-cautious surveyors be fairly accused of increasing the downward pressures on prices?
Robert Bryant-Pearson, chief executive of Allied Surveyors which represents 300 surveyors across Britain, denied any of his members had received instructions to downgrade all valuations.
He added: “Vendors can reject the valuation and hold out for a higher price. But if they are advised by an agent that the offer is as good as they are likely to get in current conditions, there might be sound arguments for taking the lower figure.”
By Jeremy Gates
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One Comment
Property experts,eh? Just who are these people with a very vested interest?
Just because a seller and a buyer have agreed on a particular price does not mean that the property valuation for mortgage purposes is correct. In the current uncertain times sellers are still trying to ignore reality and prospective purchaser may yet be grateful to surveyors for taking a realistic view of the current situation,especially if it involves flats
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