Lenders valuing UK homes for less
There has been an increasing trend of mortgage lenders across the UK valuing homes at below accepted prices, the UK’s largest mortgage adviser has warned. The number of prices undervalued over the last 12 months is the highest seen since the financial crash in 2008.
The impact of these reductions could have a serious impact on buyers, who face the risk of losing thousands of pounds in a bid to stop the sale of their home falling through. One in five valuations in the UK now find a reduced price, and compared with pricing just two years ago the ratio was as wide as one in 20.
UK Finance said the valuations were the result of responsible lending, and were keen to point out that property prices were set at a realistic rather than speculative level. The organisation said borrowers also benefited from houses having an "independent valuation".
The Royal Institution of Chartered Surveyors (Rics) stated: "The market value is based on comparable market evidence, usually a minimum of three sales transactions of similar properties in the local area, and also the professional's knowledge of the local market including supply and demand dynamics.
"For this reason, it is quite possible that the valuation for the lender - the market value - does not match an asking price for a property that has been set by the seller or agent."
