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Property purchases collapse as surveyors issue lower house price valuations


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3 minutes ago, msi said:

Just wait for another Front Page article about how Mr & Mrs Debt Junkie can't get their 'dream' house because of those pesky surveyors and banks.

Can almost see the headlines now

"Government to intervene in the surveying profession to boost the housing market"

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1 hour ago, highcontrast said:

Somerset Boy24 Jul 2020 2:20PM

The value of a house is what the buyer will pay.  Estate Agents valuations are just finger in the wind estimates, always have been. 

Not quite.

The price of house is how much a bank will lend.

Surveyors dont know nothing. A profession long over due for  rid; left overs from the old building societies days.

The CS type do in to regular valuation meetings with the banks, who tell them how much they are likely to lend.

If you want to know how much your house is worth then you need to find out what local people under 40 are earning and times that by ~4.

 

 

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1 minute ago, PaulTW said:

Can almost see the headlines now

"Government to intervene in the surveying profession to boost the housing market"

If it's a real profession, complete with cojones, it'll very publicly tell HMG to get stuffed. 

In which case HMG - or rather Mr & Mrs Taxpayer - "underwrites" the difference between the valuation by a professional surveyor and the one based on the amount outstanding on the vendor's mortgage, what next door is on at unsold or the size of the vendors'  egos.

Brilliant! I can't see anything wrong with that at all.

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7 minutes ago, Bluestone59 said:

In which case HMG - or rather Mr & Mrs Taxpayer - "underwrites" the difference between the valuation by a professional surveyor and the one based on the amount outstanding on the vendor's mortgage, what next door is on at unsold or the size of the vendors'  egos.

That is genuinely something I could see happening unfortunately. If this does start to lead to large deltas between the agreed sale price and a surveyors' valuation then nothing will move. Vendor egos take a hammering and they moan to the government they are losing money etc. 

I will not rule anything out with regards to what the government can and would do to stop house price declines.

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37 minutes ago, GodlessEndeavor said:

the three Ds (debt, death, divorce)

All very important, but the first one is likely to be the biggest and something the average UK household have been loading up on pre-crisis.

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1 minute ago, PaulTW said:

That is genuinely something I could see happening unfortunately. If this does start to lead to large deltas between the agreed sale price and a surveyors' valuation then nothing will move. Vendor egos take a hammering and they moan to the government they are losing money etc. 

I will not rule anything out with regards to what the government can and would do to stop house price declines.

In suggesting that I didn't get as far as to consider how the prop would need to be structured.

It's one thing to guarantee that buyers won't lose money (which they pretty much now do anyway) but to make this work wouldn't they have to physically pay the cash difference into the transaction to get the buyer to take the bait?

HMG is in a much better position to guarantee something and hope it's never called than to stump up actual cash which they're likely to have very little of.

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2 minutes ago, Switch625 said:

All very important, but the first one is likely to be the biggest and something the average UK household have been loading up on pre-crisis.

You obviously haven't read Spy's encouraging "% of us who'll be dead in the next 10 years" post!

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The quickest and easiest way to pop this housing bubble ( and we all know it's a bubble) is for lenders to down values agressively.

otherwise they will be repossessing everything sold in the next 6 months.

From a government point of view, better to have a huge drop early on in the electoral cycle ( blamed on covid) and then back to normal. Rather than eye-watering drops each and every year all the way through their term, and everyone made redundant throughout. 

I'd cut straight to the new normal right away if I were either government or lenders. 

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6 minutes ago, winkie said:

So a house is not what the agent values it, the builder values it or the vendor values it......it is what the lenders value it.?

It's both. A house is worth what a buyer is both willing and able to pay. The "able" part depends on lenders.

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9 minutes ago, winkie said:

So a house is not what the agent values it, the builder values it or the vendor values it......it is what the lenders value it.?

It always have been like that. Of course unless there is a cash buyer.

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25 minutes ago, micawber said:

You obviously haven't read Spy's encouraging "% of us who'll be dead in the next 10 years" post!

Based on real life expectancy data.

Noone lives forever.

 

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8 minutes ago, GodlessEndeavor said:

It's both. A house is worth what a buyer is both willing and able to pay. The "able" part depends on lenders.

So will  then be more able if lending valuations are lower.....?

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5 minutes ago, squeezed said:

It always have been like that. Of course unless there is a cash buyer.

Cash money is the buyers money.......lent money is the lenders money......lower valuations must be telling us prices are not gaining, some might be losing.......less room for increase manoeuvre.?

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1 hour ago, spyguy said:

Somerset Boy24 Jul 2020 2:20PM

The value of a house is what the buyer will pay.  Estate Agents valuations are just finger in the wind estimates, always have been. 

Not quite.

The price of house is how much a bank will lend.

Surveyors dont know nothing. A profession long over due for  rid; left overs from the old building societies days.

The CS type do in to regular valuation meetings with the banks, who tell them how much they are likely to lend.

If you want to know how much your house is worth then you need to find out what local people under 40 are earning and times that by ~4.

 

 

My understanding is that surveyors definition of market value is simply the price paid at valuations date in normal market ie. not the owner next door who would pay more or the seller in a hurry who would accept less

this is an entirely circular definition that just rubber stamps 99% Of the prices paid and leaves banks free to base their lending  decision on other criteria 

unlike say a company valuation that considers income streams, likely market conditions in future , bit of sensitivity’s analysis etc 

they will stick their head in a property and find a few in the area at a similar price to tick the purchase price box unless anything fundamentally wrong with the property or unusual sale eg not marketed normally 

I had our flat valued formally for a family dispute where there wasn’t a transaction to go on. The guy valued low to limit his liability which was actually in our favour but was amazed by how little work actually done, just happened to be a basically comparable flat on at the same time at 400k when no other sales within the year below 450k. Could equally have ‘proved’ 500k, say if his instructing party had wanted this figure as there were sales around that level too. Basically very little rigour and only heavily caveated and safe report


But what do you expect for a £600 fee with potentially ruinous PI cost?

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57 minutes ago, rantnrave said:

Telegraph has become very bearish recently

I remember a few years ago the Telegraph suddenly started having articles questioning if BTL was worth it. A few months later S24 came out.

I don't really subscribe to elitist power conspiracies but I do wonder about governments using closely linked press as sounding boards for up coming policies. It's worth looking over the comments on the OP article - they are definitely towards the 'prices are ridiculous' end of the scale.

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  • 415 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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