Housing market insiders have warned that down valuations on properties are on the rise.
This occurs when a mortgage lender’s surveyor assesses a property as being worth less than the price a buyer has agreed to pay for it.
This could be because of market conditions, over-optimistic pricing or issues with the property.
Often, it leads to less favourable mortgage terms being offered.
“The level changes depending on the area of the country but I would say they’re about 10% on average,” Jonathan Alvarez Herrera, mortgage consultant at Ayla Mortgages, told Newspage.
“I have found the South East and London particularly affected, but this is simply down to the fact that properties have a higher value.
“On remortgages, a down valuation could push the case into a higher loan-to-value, meaning borrowers will have to pay a higher interest rate.”
He warned that it could jeopardise a purchase altogether unless the client was able to put down a larger deposit.
‘Valuations have become a postcode lottery’
Patricia McGirr, founder of Repossession Rescue Network, warned of the impact down valuations were having.
“Property down valuations are turning transactions, and lives, upside down,” she said.
“Even the same surveyors are cutting values within months, particularly in London. Whether it’s lender caution, local sentiment or pre-budget jitters, valuations have become a postcode lottery.”
