Down-valuations on the rise – warning…

Down-valuations appear to be on the rise and it is shocking agents and mortgage brokers.

Property professionals have seen an uptick in valuations for banks coming in lower, often with little evidence.

Laura Bairstow, founder of The Mortgage Masters, told the Newspage agency: “We have noticed a definite increase in down valuations, especially in instances where the borrower only has a 5% or 10% deposit. Interestingly, we had a case this week where both the borrower and the estate agent were shocked at the extent of the down valuation so the borrower opted to have an independent valuation of the property and it came in at the asking price, way above what the lender had valued it at.”

Gareth Davies, director of South Coast Mortgage Brokers, said:  “It’s down valuation central right now. We’re seeing a clear uptick in surveyors disagreeing on valuation figures. 

“We’ve had three cases this week where a surveyor has stated a value less than what the property was bought for in 2022, despite no evidence to suggest that this is happening in the respective regions. 

“One client was furious with the attitude of the surveyor that came out to his house, as he apparently seemed ‘hell-bent’ on disagreeing with the estimated value from the second he entered the door. He even said that the place was on the ‘lower end of the scale’, despite being a beautiful detached four-bed place.”

Steven Hargreaves, adviser at The Mortgage Co, suggested the increase is due to the low number of properties for sale, an upturn in buyers returning to the market and valuers being very cautious based on the past 12-18 months. 

He said: “We have seen a number of properties recently with multiple offers and therefore agents inviting ‘best and final offers’ means that, to secure a property, people feel they have to increase their offer beyond the asking price.

“Interesting times and we expect more down valuations over the coming months unless we have a positive upturn in housing stock or valuers becoming more optimistic, which will not happen.”