Down Valuations Increase As Housing Market Slows

[Woot]

by Gill Montia September 3, 2007 Recent reports in the press suggest that professionals involved in valuing property are becoming more cautious in their valuations.

The trend is related to fears that the UK could experience difficulties similar to those in the US, where the growth in sub-prime mortgage lending led to a crisis in the money markets.

This crisis, combined with rising interest rates, has left UK lenders mindful of protecting themselves against lower house price inflation, and the possibility that UK house prices might even fall.

As a result, the number of down valuations, which rarely occur when the housing market is buoyant, may increase substantially.

A surveyor will down value a property when he or she decides that the property value for mortgage purposes is less than the agreed purchase price.

John Charcol, the independent mortgage broker, has seen an increase in the incidence of down valuations over recent weeks, as the housing market has slowed down.

The broker has confirmed that the majority of down valuations have been between 5% and 10%.

A reality check, at last, amongst surveyors... this is pretty big though: a bit of a watershed in the whole process.

TD

[Fully Detached]

And still Ray Boulger, "Technical Manager" of John Charcol, persists in telling us that everything is perfectly OK.

Edit for Link:

BBC Article

Edited September 3, 2007 by Crash Gordon

[Woot]

Indeed, I thought it was fascinating that they had got Charcol to confirm the down valuation figures - and indeed if Charcol are admitting to 5-10%, what are the real figures from an objective source?

TD