Down valuations are becoming a regular feature of the market, according to some brokers.
Jane King, mortgage adviser at Ash-Ridge Private Finance, said that she was seeing repeated down valuations for properties in London and the South East, and admitted that to see two down valuation cases in a day was “particularly depressing”.
She noted that many of the down valuations she has seen have been “quite trivial”, often by £10-£20,000, and “almost feel like valuers are doing it just because they think they should”, though in some cases they have been sufficient to bump a client up an LTV band.
She added: “There has been a big flurry of sales going through since Christmas which was put down to vendors accepting sensible offers, so I cannot see why valuers would down value them even further, especially when there seems to be no shortage of buyers right now.”
Cautious desktop valuations
David Sheppard, managing director at Perception Finance, said he was seeing more caution on valuations, but noted this was not isolated to cases when a surveyor goes out.
He cited a recent case where the lender opted to use a desktop valuation, which gave a much lower value which would have meant the client having to go for a worse rate than that which they originally applied for.
It was only after a surveyor physically visited the property and provided the higher valuation that the borrower was able to continue on the rate they had wanted at the outset.
Sheppard said: “I understand the desire to streamline a remortgage process by using automation but this should only ever be used to support a figure that has been provided rather than to contest it especially in cases that can be proved to be inaccurate such as this one.”
The lender view
However, Becci Moreton, assistant product manager at Accord Mortgages, said the lender had not seen any significant changes to the number of valuations that differed from the initial estimated value.
She continued:“We monitor all valuations closely and where a property is declined, or valued differently to the estimated purchase price, we do look into why this is. All of our valuations are undertaken by qualified professional valuers and our analysis shows that when a valuation is received at a different figure it is almost always the case that the estimated value is too high, rather than the valuation being too low.”