Mortgage valuers 'overly cautious'
Updated on 09 July 2009
Property sales are falling through because mortgage valuers are being overly cautious about how much a home is worth, estate agents and housebuilders believe.
Estate agents estimate that as many as one in seven properties are being valued at below their sale price, despite vendors reducing their initial asking price and buyers negotiating significant discounts.
The problem is particularly acute for new build properties, on which valuers already have to factor in any incentives offered by the developer and the so-called never-been-lived-in premium when assessing the re-sale price of a home.
Housebuilders Barratt and Redrow warned that mortgage valuations continued to be a major stumbling block in sales.
Barratt said it had been forced to turn away sales after valuations came in too low amid extreme bank caution over lending.
A spokesman for the Home Builders Federation said: "There is an issue with valuations and it's a concern to the industry.
"We are trying to work with the lenders, their representatives and also with the Government to find ways to improve the situation."
Property valuations are typically based on the sale price of three comparable properties which have recently changed hands.
But it is often hard to find comparable properties for homes on a very new development, particularly due to the current low volume of transactions.
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