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NeilD

'beware: Steep Drops'. A Sunday Times Article

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Interesting article in the Sunday Times yesterday about the rise of Surveyors marking down the valuation of property over the last few months. The article says 23.6% of all UK properties were down valued by the surveyor (instructed by a mortgage lender) after the offer of the higher amount was accepted in the first quarter of this year. 'There are more instances of down valuations in a falling market as people don't want to accept their property has dropped in value' says Richard Sexton, a director at E.surv.

There was an example of a house in Fulham having an offer accepted at £2.5m and then being told by the mortgage valuer it was worth £100k less

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Proof - if any is needed - how 'independent' the surveyors really are(n't).

The whole industry really does seem rotten throughout.

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Most private industries are built on long standing relationships with regulators/auditors occasionally changing the rules around the margins. That's what business is...People don't just start a business and provide a service and get paid for it - that's what employees do. If you do start a business you realise its about consistency and relationships. Not just turning up and providing a service - being an entrepreneur is more a lifestyle choice than a job.

No surveyor (who has fought hard to get on to a lenders panel) can afford to not take his customers considerations into account when performing a valuation. Its the banks money so its their rules. Not sure what else you can say. People who know each other well tend to rely on each other to perform their business activities in the most profitable way. Not sure what is wrong with that.

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Its the banks money so its their rules. Not sure what else you can say. People who know each other well tend to rely on each other to perform their business activities in the most profitable way. Not sure what is wrong with that.

Yes. You can't expect surveyors to know the bank side of operations, when they make valuations. They may need a nudge about new information.

Banks likely to need to hold more capital, and stress tests will show this, with more banks not passing.

After all, there's people on here who think the money never runs out, and the £30,000 semi in the 1980s now worth £300,000 (protected QE/rates from 2007), going to be worth £3,000,000 in 30 years - and many other people the same out there.

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So the mortgage lender asks for the value to be marked down and the surveyor complies? What a great system of impartiality.

House prices are a function of bank lending. I guess surveyors need to know how much money is likely to be lent out in the future as it will determine prices.

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There was an example of a house in Fulham having an offer accepted at £2.5m and then being told by the mortgage valuer it was worth £100k less

Just to say that's a very small drop not a "steep drop". The steep drops must be in the pipeline? - as always.

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All that most surveyors do is measure the approximate sq footage, add that to a spreadsheet of similar sales in the same street/area and draw a line through the points, maybe adjusting the final price slightly if the house is in particularly good or bad condition. I've never understood how they can justify charging hundreds of pounds for what is about 10 minutes of unskilled work.

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I flicked though the ST and didn't see the story.

Here's the teaser part on their own website: http://www.thesundaytimes.co.uk/sto/style/homes_and_gardens/Move/article1429533.ece

This five-bedroom home in Lambeth, south London, was on the market recently for £1.975m. A buyer agreed to pay the asking price, but the mortgage lender valued it at £1.8m. Nevertheless, the house exchanged for the full amount

Doesn't mean anything yet. 2012 was the same, before wonderful HTB and with it the impression to easily minded people that Gov would support the market, for more wild abandon buying at ever higher prices.

2012: http://www.thesundaytimes.co.uk/sto/business/money/mortgage_and_property/article1036335.ece and others from 2010, 2009.

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It's like Liar Loans in reverse, before they would lie to inflate the price, now they can lie to undervalue assets so they have a larger LTV safety net for the coming crash.

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Who owns, in many cases the majority of the property....the biggest shareholder therefore wants the best price. ;)

Not the banks...

You'd almost think people here didn't want house prices to fall.

Proof - if any is needed - how 'independent' the surveyors really are(n't).

The whole industry really does seem rotten throughout.

Few owners have complained when it was gifting them stupid hpi for years, even when they wanted to upsize. Deal with it.

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Recently sellers have been bumping-up asking prices to silly levels, not 5 or 10 percent but 20 to 25. The Surveyors are just bringing these greedy people back down to earth. The market is frothy but some people seem to think it gone ballistic missile.

Nothing much here.

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Some info since Christmas - catching out some 'experienced' investor/landlord flippers.

``I can't think of any other industry where one person can stop or curtail your plans as much as a valuer. ``

http://www.propertytribes.com/reasons-property-might-not-achieve-higher-valuation-after-t-9690.html

They look to have a lot of power... just need someone to prod them to use it (mortgage lenders).

Can't find the post now from another forum. A recent post.. London woman, (who also bought a BTL last year) now wants to sell her main home in London where 'prices have gone crazy'. Valuer paid no attention to 3 comparables and she was upset he valued it at an early 2013 price, and was blunt in his work.. some £60K below what she was hoping for. And seperately she then found out fancy kitchen extension with those boom-world multi-folding doors, never had been passed off by Building Control when she bought the house in 2006.

Rightmove Index June 2014

Shipside notes: “Many serious buyers who were waiting in the wings have now bought and moved in, taking a slug out of the pent-up demand for a few years to come, and the consequent chatter on the street is that quality buyers are now thinner on the ground. The next wave of buyers may have less motivation or ability to buy and sellers are going to have to be sensitive to their local market and not pitch their asking prices too high as choosy buyers will not arrange to come and visit.”

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All that most surveyors do is measure the approximate sq footage, add that to a spreadsheet of similar sales in the same street/area and draw a line through the points, maybe adjusting the final price slightly if the house is in particularly good or bad condition. I've never understood how they can justify charging hundreds of pounds for what is about 10 minutes of unskilled work.

Agreed. Ultrasonic measuring tape & a laptop is all that's needed. Adjustments also made on how long the comparable houses used took to sell. So a slow market automatically reduces the 'value' of a property.

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Most private industries are built on long standing relationships with regulators/auditors occasionally changing the rules around the margins. That's what business is...People don't just start a business and provide a service and get paid for it - that's what employees do. If you do start a business you realise its about consistency and relationships. Not just turning up and providing a service - being an entrepreneur is more a lifestyle choice than a job.

No surveyor (who has fought hard to get on to a lenders panel) can afford to not take his customers considerations into account when performing a valuation. Its the banks money so its their rules. Not sure what else you can say. People who know each other well tend to rely on each other to perform their business activities in the most profitable way. Not sure what is wrong with that.

Commonly known as cronyism.. Just like our current captialism, crony capitalism.

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Agreed. Ultrasonic measuring tape & a laptop is all that's needed. Adjustments also made on how long the comparable houses used took to sell. So a slow market automatically reduces the 'value' of a property.

thanks for pointing this out

didn't know that influences the "value"

will hopefully feed into the downward spiral to come...

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