11 August 2009
SELLERS SUFFERING FROM VALUATION BLUES
Residential properties are being undervalued by mortgage lenders causing sales and remortgages to fall through, according to research conducted by the National Association of Estate Agents (NAEA).
Discrepancies between agreed sale prices and valuations carried out by surveyors are having a detrimental effect on the number of property transactions.
NAEA members believe that mortgage lenders could be undervaluing properties by as much as 10 per cent with a large majority (69 per cent) of agents experiencing 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.
Further to this, 86 per cent had seen further negotiations take place as a direct result.
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.
“We all know that valuation is not an exact science and you can understand under current market conditions people erring on the side of caution. But is it fair that they value a property based on what might happen in the future rather than what is happening today?"
“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.
“At a time of great market uncertainty, homeowners need help not more obfuscation from those operating within the property market.”
Ends
Editor Notes
Editor Notes:
About the NAEA
The National Association of Estate Agents (NAEA), the residential sales arm of the National Federation of Property Professionals (NFOPP), is the UK’s leading professional body for estate agency personnel, representing the interests of around 10,000 members who practice across all aspects of property services both in the UK and overseas.
These include residential and commercial sales and lettings, property management, business transfer, auctioneering and land. The National Association of Estate Agents is dedicated to the goal of professionalism within all aspects of property, estate agency and land. Its aim is to reassure the general public that by appointing an NAEA member to represent them they will receive in return the highest level of integrity and service in both sales and lettings, for all property matters.
Each NAEA member is bound by a vigorously enforced Code of Practice and adheres to professional Rules of Conduct. Failure to do so can result in heavy financial penalties and possible expulsion from the Association.
For further information contact:
NFOPP PRESS OFFICE
Tel: 020 3128 8181
E-mail: press@nfoppmedia.com
Follow Peter Bolton King on Twitter at www.twitter.com/peterboltonking
