Monday, Jan 14, 2008
"While I can live with a relatively minor fall in value from £170,000 to £165,000, one has dropped from £700,000 to £600,000 - a massive 14%"
Mortgagestrategy: Surveyors must not stall the market
Why downvaluations are happening is a mystery. I realise that the property market is generally flat with potentially falling values on the radar, but if valuers continue to give lower than anticipated valuations, the prophesy will become self-fulfilling. We are already in danger of talking the market into the doldrums but if valuers are starting a trend we could be in trouble soon. This may be a good time for lenders to exert a steadying influence on their surveying partners.
Posted by jack c @ 06:44 PM (1503 views) Add Comment
19 Comments
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1. Tim Bandite said...
Sounds to me like the lenders are exerting a steady influence on their surveying partners... but in a more cautious direction.
2. renting2 said...
Hope the surveyors have good indemnity insurance then. As anyone buying on the strength of a valuation seeing their house price drop significantly and suffering disadvantage because of it, would of course look to sue someone.
I think the surveyors are heading that one off at the pass as it's not their problem if prices drop. Their job is to give a realistic valuation within the known market so protecting both the borrower and lender in the process.
They also do not care if the house actually sells, they were paid for doing the val/survey.
3. justwatching said...
second paragraph 'three of our REMORTGAGE cases'
c'mon confused, where are you.
My very own guffaw, te he.
4. justwatching said...
Oh no, I read the whole article, 'why downvaluations are happening is a mystery?', 'equity release client will be hard hit too'
I'm off to change my pants.
5. tyrellcorporation said...
All these VI groups need turnover and without that they're goosed. Ironically these guys will chase the market down almost as fast as they chase it up. Ultimately they'll go for a crappy sale rather than no sale.
6. the reaper said...
'Why downvaluations are happening is a mystery' loved that line
7. jack c said...
"This may be a good time for lenders to exert a steadying influence on their surveying partners"
--------- just a quick note to make regular visitors aware that the largest residential lender in the UK market has it's own UK wide valuations company which I believe it uses almost exclusively - so if like me you wondered why the market has defied gravity for so long it's partly down to this type of VI market influence.
8. Peter Kiddle said...
This woman needs to grow up.
If she had half a brain in her empty head she would be encouraging EAs and surveyors to talk the market down. How else are they to maintain market share in a collapsing market?
9. magnifico said...
Downvaluations have started. My EA has told me that the market hasn't yet moved after the Xmas break, blaming it mainly in the failure of the BoE to lower interest rates. It took all my self control to keep a straight face. Where are you, o confused, when we need you?
10. it_is_going_with_a_bang said...
"Sue Read, head of mortgages, Jobson James"
Lenders exert an influence???
That is probably close to being illegal isn't it? Not forgetting it is also an 'assurance' for the person buying that it is actually worth what they are being asked.
The valuation is afterall used for insurance/indemity.
The lenders stil have the option to lend 300k for 250k property if they wish. Except their insurance/underwriters probably won't allow it so they want the surveyors to 'fiddle their' books.
I'm lost for words on this one. The WHOLE POINT of a surveyor is that it is a totally professional inbiased opinion.
"Why downvaluations are happening is a mystery"
Really?????
11. drewster said...
This is priceless! Surely she can't be serious?
Here's the old let's-not-talk-ourselves-into-a-recession nonsense:
"If valuers continue to give lower than anticipated valuations, the prophesy will become self-fulfilling."
Luckily she knows what it will take to solve the problem: lies:
"This may be a good time for lenders to exert a steadying influence on their surveying partners."
Ho ho ho!
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13. Craig said...
This is too funny.
Too many amatuer investors have become victims of the market being over-inflated by the short term greed of the mortgage lenders, serveyors, estate agents, buy-to-letters and speculators, but only see this when there's a chance that their investment will go down. The worst of this, is that in this case, they want to the market to stay flat just long enough for them to bail out and leave the others with a greater problem.
14. This comment has been removed as it was found to be in breach of our Blog Policies.
15. confused76 said...
Lenders are exerting influence and asking surveyours to give conservative valuations in order to create a safety buffer in case of default.
This was clearly the case in Chelsea where the BTL market of Eurotrash investors has been stopped in its tracks by surveyors instructed by lenders to enforce conservative weekly rentals marked down by a 20% vacancy rate assumption. Sellers then started chasing buyers offering rebates. The final blow was given by the falling Pound.
Now the Chelsea BTL market is a laughing stock... AT LAST!
16. Craig said...
What interest would the surveyors have in keeping prices high and freezing up the housing market?
For them to maximise profit they need to maximise sales, keeping the market efficient. In a falling market, they give a falling price, they'd better take it now before it drops further.
17. renting2 said...
Where was the steadying influence when the market was rocketing up?
18. Icarus said...
Drive-by valuers who fail to see a barn and a couple of acres? Shome mishtake shurely.
19. yorkshireman said...
"This could mean that remortgaging ultimately becomes impossible for certain clients, many of whom may also be suffering because of the liquidity crisis."
They should read Rosie Millard - apparently she will not be using her house as a bank. Maybe others should follow her lead ?