NAEA members believe that mortgage lenders could be undervaluing properties by as much as 10 per cent with a large majority (69 per cent) of agents experiencing problems with lenders’ valuations after a sale is already agreed.
65 per cent of those who took part in the poll of UK agents said that property sales had fallen through as a result of down valuations.
Further to this, 86 per cent had seen further negotiations take place as a direct result.
Peter Bolton King, chief executive of the NAEA, said: “Our members have heard in several cases that lenders gave specific instructions to their valuers as to how they should approach these valuations.
“We all know that valuation is not an exact science and you can understand under current market conditions people erring on the side of caution. But is it fair that they value a property based on what might happen in the future rather than what is happening today?"
“Undervaluing properties creates the knock-on effect of sellers having to drop prices and those homeowners who are looking to re-mortgage their property being left with little room for manoeuvre. “Whilst I understand that lenders are operating under severe constraints, it is neither fair nor ethical for valuations to be lowered on the basis that it might reduce exposure to competitive loan rates,” explained Mr Bolton-King.
“At a time of great market uncertainty, homeowners need help not more obfuscation from those operating within the property market.”
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