Sam Cordon is a reporter at Mortgage Introducer
Most conversations that I have with brokers at the moment involves them telling me how busy they are with the level of enquiries they are receiving.
But cropping up, too often to ignore, is the problem of properties being down valued.
It seems the problem has been creeping up gradually and while it might not be easy to spot in any one month, looking back over the last three quarters some brokers are arguing that it can be clearly seen that a pattern is emerging.
Waiting for the valuation to come back has been described as “buttock clenching” despite the studious broker carrying out comparables beforehand.
Most complaints centre on the down valuing of new build flats.
While this is not new news, because there are so many new build flats it is very much an ongoing problem – and unsurprisingly the appetite to live by a cleaned up but still smelly canal has dampened somewhat over recent years. Moreover, though, the issue is not isolated to purely this type of property or indeed new build.
Properties being labelled as “not mortgagable” was the gripe of one bridging broker who said that he has received too many of these verdicts in recent months for this to be coincidental - prompting him to wonder if surveyors are trying to limit their exposure and professional indemnity by looking for reasons to limit their risk of getting sued but still collecting a fee.
And the apartment epidemic is prompting some brokers to add £15,000 to the property value in preparation for the valuer to simply lop this off.
While many estate agents - along with intermediaries - advise their clients to make sure they leave a space in the drive way for the surveyor to park his car (because if he has to walk around the block in the pouring rain then this can damage the value of the property) the level of rudeness of the occupier too has been quoted as a detrimental factor.
Putting aside these comical tales of reasons for down valuations – brokers are not unsympathetic to the plight of the valuer who finds himself in a tug of war between the lender and the broker.
Some are questioning what is going on behind the scenes, who knows what pressure the lender is putting on its valuers and the threat of law suits and being struck off panels is very real. Are they forced to taper their values to the risk appetites of different institutions?
And, let’s not say the broker is completely blameless in the process.
Overstating values to get a lower interest rate or more money from the deal does go on in the sphere of the more unscrupulous broker.
But coming back to the point of increasing the valuation for it to be knocked down begs the question – should it not be a more exact science than that?
There will be factors which affect the valuation of a property such as a repossession on your street, a property sold at auction or the scruffy neighbour next door with the sofa in the front garden which drags everything else down around it.
But a twitchy or narked surveyor, an over zealous broker or lender prejudiced against pebble dash houses should not be any of those factors.
What is needed is discussion between the parties involved, some gloves off, cards on the table truth time about what is driving this so called negative trend – and to risk sounding like a member of the FSA, promote valuations which are clear fair and not misleading.
