Telegraph: Banks undervaluing our property, say small firms seeking loans

The Forum of Private Business (FPB) said that banks are taking pessimistic valuations of properties when considering them as security for bank debt, forcing business owners to either accept "unfairly" high interest rates on credit or forgo loans completely. Business owners are citing increased security demands as one of the reasons they are failing to secure finance. The FPB said that low valuations were exacerbating the problem. In one example, Gordon Hazelton, of Glasgow-based Gordon Hazelton Wheels and Tyres, believes the Bank of Scotland undervalued his property by up to £100,000 when negotiating credit. Banks rely on independent valuers – who must act within guidelines specified in the Royal Institution of Chartered Surveyors' Red Book – to price property.