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The Masked Tulip

House Price Bust: Surveyors Feel The Heat

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Nice follow up article to the story earlier this week about surveyors being increasingly sued.

http://www.citywire.co.uk/money/house-price-bust-surveyors-feel-the-heat/a494835?ref=citywire-money-latest-news-list

It was greedy, reckless bankers who caught most of the flack, for conspiring to turn a collective blind eye to the unsustainable debt bubble, lending like there was no tomorrow until there really almost was no economic tomorrow.

But then there were the borrowers, too. They and we took the money and ran, and took it again when those cartoonishly inflated residential property prices made it possible to remortgage and blow the profits on holidays and cars.

Mortgage brokers have been held to account, in droves, for playing fast and loose with the law. Their roles in the whole shameful boom and bust were manifold: from teaching destitute borrowers how to lie on their loan applications to organised new-build scams aimed at skimming extra value off each and every loan.

But let’s not underestimate the role of the surveyor, who was there at every stage, providing a helpful tick of the biro to ease the flow of bad monhttp://www.housepricecrash.co.uk/forum/index.php?app=forums&module=post&section=post&do=new_post&f=22ey.

Now… they’re being sued. And by the hands that once fed them.

A test case, heard in the Court of Appeal earlier this week, might open the door to litigation brought by buy-to-let landlords who don’t feel they’ve been dealt the hand they were promised.

Scullion vs Colleys dates back to 2002, when Mr Scullion bought a buy-to-let flat, based on a valuation (of both capital value and rental income). The valuation turned out to be optimistic, and Scullion sought damages. Colleys (the Bank of Scotland’s valuation wing) denied it owed the usual duty of care because Mr Scullion wasn’t a residential buyer… he was an investor. Different rules applied.

The whole article is worth a read.

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I visited various developments in Corby (don't ask) in 2007 with a view to BTLing. The brochures the various marketing suites handed out predicted wildly inflated rental income/yields.

Those buying on the strength of that were undoubtedly burned

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I visited various developments in Corby (don't ask) in 2007 with a view to BTLing. The brochures the various marketing suites handed out predicted wildly inflated rental income/yields.

Those buying on the strength of that were undoubtedly burned

Has the direct trainline from London not brought the City prices flooding in to Corby yet? But it was advertised on the Underground an' everything....

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Has the direct trainline from London not brought the City prices flooding in to Corby yet? But it was advertised on the Underground an' everything....

Corby has a direct train line to London now? I'm packing up and moving there straight away!

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I haven't done a mortgage valuation for years but last time I did the lender wanted an answer to a very simple question. What is the market value? In my view that is not really adaquate. If, for instance, I had been asked the market value of a new build 2 bed flat on the riverside in SE28 in 2006 I would unhesitatingly have said £249,995 and been able to back my opinion with bags of evidence. The problem is the question not the answer. Had I been asked , is this a prudent purchase at this price? I would have said no. Had I been asked will this property provide adaquate security for the loan? I would have said no. Market value is not some magical formula which confers rightness on a purchase, It just means this is what you will have to pay and if you dont the evidence shows that somebody else will. Even if they are all mad to buy at that price that is still the market value. Some valuers were undoubtedly negligent and some criminal but most were not, and some are now being sued for doing no more than they were asked and doing it properly.

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Now… they’re being sued. And by the hands that once fed them.

:lol: If shyster lawyers weren't going to benefit hugely from this, it would be almost perfect.

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I visited various developments in Corby (don't ask) in 2007 with a view to BTLing. The brochures the various marketing suites handed out predicted wildly inflated rental income/yields.

Those buying on the strength of that were undoubtedly burned stupid.

Corrected for you :-)

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I haven't done a mortgage valuation for years but last time I did the lender wanted an answer to a very simple question. What is the market value? In my view that is not really adaquate. If, for instance, I had been asked the market value of a new build 2 bed flat on the riverside in SE28 in 2006 I would unhesitatingly have said £249,995 and been able to back my opinion with bags of evidence. The problem is the question not the answer. Had I been asked , is this a prudent purchase at this price? I would have said no. Had I been asked will this property provide adaquate security for the loan? I would have said no. Market value is not some magical formula which confers rightness on a purchase, It just means this is what you will have to pay and if you dont the evidence shows that somebody else will. Even if they are all mad to buy at that price that is still the market value. Some valuers were undoubtedly negligent and some criminal but most were not, and some are now being sued for doing no more than they were asked and doing it properly.

Good post.

The market value is the price that people are willing and able to pay at that point in time. Any surveyor confirming this price as being the market value is doing his job properly.

If the price that people are willing and able to pay for the property subsequently falls (or rises) there is no comeback on the surveyor; he was simply identifying the market value at that particular point in time.

I am sure that most surveyors fall into this category. I am equally sure that there were many bent ones in the pockets of developers etc. These are the ones who should be being taken to task.

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...drive-by valuation, beginning of the end....nice work if you can get it. ;)

There are circumstances where a drive by is all that is needed. For instance if you are doing the job for taxation purposes and anything below a certain figure will see the taxpayer free and clear sometimes the answer is so obvious that anything more would be a waste of the clients money. I struggle, however, to see how this can ever be the case with a mortgage valuation.

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You should have behaved like the Oracle at Delphi and answered the question with a question or a riddle.

e.g. "What is the valuation of this oh Oracle, knower of all value?"............."When?"

With the famous signs above the entrance reading 'Know Thyself' and 'Everything in Moderation' you'd be mistaken for the real one.

I'm due to retire later this year, perhaps I'll try the Delphic method of reporting in my last week.

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:lol: If shyster lawyers weren't going to benefit hugely from this, it would be almost perfect.

lawyers fees for the transfer of an allotment from council managed to being self-managed (bearing in mind the same inspection rules etc apply to the council as when transfered as before... so no staff savings) are about £1250 minimum.

So that's just a lawyer fest too.

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Worth it for this bit alone....

"cartoonishly inflated residential property prices"

Fantastic :D Can you imagine how mental people would have thought you were if you had used that phrase back in 2006!!

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Worth it for this bit alone....

"cartoonishly inflated residential property prices"

Fantastic :D Can you imagine how mental people would have thought you were if you had used that phrase back in 2006!!

I so wish I could use that phrase for official purposes.

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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