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| Undervaluing 'hitting home sales' | Undervaluing 'hitting home sales' |
| (about 8 hours later) | |
| Property sales and remortgage deals are collapsing because some mortgage lenders and surveyors are deliberately undervaluing homes, estate agents say. | Property sales and remortgage deals are collapsing because some mortgage lenders and surveyors are deliberately undervaluing homes, estate agents say. |
| Properties are typically being undervalued by at least 10%, said the National Association of Estate Agents. | Properties are typically being undervalued by at least 10%, said the National Association of Estate Agents. |
| It said surveyors afraid of being sued by lenders were being overcautious. | It said surveyors afraid of being sued by lenders were being overcautious. |
| But the Royal Institution of Chartered Surveyors denied the claim, saying the housing market was constantly changing and had lots of "imperfections". | But the Royal Institution of Chartered Surveyors denied the claim, saying the housing market was constantly changing and had lots of "imperfections". |
| Mortgage lenders, such as banks, routinely commission surveys to ensure the price agreed for a sale reflects the property's current value. | Mortgage lenders, such as banks, routinely commission surveys to ensure the price agreed for a sale reflects the property's current value. |
| 'Insurance fear' | 'Insurance fear' |
| If the valuation placed on the property by the lender is lower than the agreed price, the lender may choose to offer a smaller mortgage, leaving the buyer without enough money to cover the asking price and causing the deal to collapse. | If the valuation placed on the property by the lender is lower than the agreed price, the lender may choose to offer a smaller mortgage, leaving the buyer without enough money to cover the asking price and causing the deal to collapse. |
| Lenders may also check the value of a property when it is being remortgaged to ensure they are not lending more than it is worth. | Lenders may also check the value of a property when it is being remortgaged to ensure they are not lending more than it is worth. |
| If a property is repossessed and the lender is forced to sell below its purchase price, it can sue the original valuer for negligence. | If a property is repossessed and the lender is forced to sell below its purchase price, it can sue the original valuer for negligence. |
| They are perhaps worried about their professional indemnity insurance Peter Bolton KingNational Association of Estate Agents MPs attack mortgage arrears fees class="" href="/2/hi/talking_point/8191283.stm">Read some of your comments | |
| This occurred regularly during the housing slump of the early 1990s and, the NAEA said, as a result of the uncertainty in today's market, valuers are once again "frightened". | This occurred regularly during the housing slump of the early 1990s and, the NAEA said, as a result of the uncertainty in today's market, valuers are once again "frightened". |
| Chief executive Peter Bolton King told the BBC: "They are perhaps worried about their professional indemnity insurance - they are thinking back to the 90s when surveyors were being sued by lenders for allegedly not getting the valuations right. | Chief executive Peter Bolton King told the BBC: "They are perhaps worried about their professional indemnity insurance - they are thinking back to the 90s when surveyors were being sued by lenders for allegedly not getting the valuations right. |
| "They are perhaps worrying about the market and almost deliberatively knocking off 10% almost regardless of what the property sold for. | "They are perhaps worrying about the market and almost deliberatively knocking off 10% almost regardless of what the property sold for. |
| "The other reason, which I found more worrying, is that we are hearing anecdotally that lenders are giving specific instructions to their valuers as to how they should approach these valuations." | "The other reason, which I found more worrying, is that we are hearing anecdotally that lenders are giving specific instructions to their valuers as to how they should approach these valuations." |
| 'Duty bound' | 'Duty bound' |
| Sellers are also affected by undervaluing as they may have to drop prices and those seeking remortgages are left with little or no flexibility. | Sellers are also affected by undervaluing as they may have to drop prices and those seeking remortgages are left with little or no flexibility. |
| One homeowner, Theresa Timms, told the BBC she had had problems remortgaging her home in Bridgend. | One homeowner, Theresa Timms, told the BBC she had had problems remortgaging her home in Bridgend. |
| "The bank sent their own valuer who valued it at £80,000, but I knew it was worth far more so I paid £300 to get it revalued," she said. | "The bank sent their own valuer who valued it at £80,000, but I knew it was worth far more so I paid £300 to get it revalued," she said. |
| "The valuer came and said it was worth £100,000, but it was the same person that made the first valuation." | "The valuer came and said it was worth £100,000, but it was the same person that made the first valuation." |
| There will be a range of valuations that the valuer will look at before they arrive at their opinion of value Barry Hall, Royal Institution of Chartered Surveyors | There will be a range of valuations that the valuer will look at before they arrive at their opinion of value Barry Hall, Royal Institution of Chartered Surveyors |
| Andrew Frankish, managing director of independent broker Mortgage Talk, said: "With the mortgages that are not completing, we believe up to half of them are affected by the valuation. | Andrew Frankish, managing director of independent broker Mortgage Talk, said: "With the mortgages that are not completing, we believe up to half of them are affected by the valuation. |
| "What we mean by that is the valuation is coming back at lower than they predicted, which pushes them into a higher loan to value, which means the products are too expensive or the banks are reluctant to lend in that market at all. | "What we mean by that is the valuation is coming back at lower than they predicted, which pushes them into a higher loan to value, which means the products are too expensive or the banks are reluctant to lend in that market at all. |
| "This is even worse in remortgages where around three-quarters of remortgages are affected." | "This is even worse in remortgages where around three-quarters of remortgages are affected." |
| The Council of Mortgage Lenders said it works with professionals who are duty bound to give accurate valuations. | The Council of Mortgage Lenders said it works with professionals who are duty bound to give accurate valuations. |
| Those who value homes also deny any deliberate undervaluing. | Those who value homes also deny any deliberate undervaluing. |
| Barry Hall, from the Royal Institution of Chartered Surveyors, said: "We are dealing with a market where there are lots of imperfections and there will be a range of valuations that the valuer will look at before they arrive at their opinion of value. | Barry Hall, from the Royal Institution of Chartered Surveyors, said: "We are dealing with a market where there are lots of imperfections and there will be a range of valuations that the valuer will look at before they arrive at their opinion of value. |
| "That opinion of value could well be different from another opinion of value and could fluctuate over a period of time as well." | "That opinion of value could well be different from another opinion of value and could fluctuate over a period of time as well." |
| Has your property been undervalued? Send us your experiences using the form below. | Has your property been undervalued? Send us your experiences using the form below. |
| The BBC may edit your comments and not all emails will be published. Your comments may be published on any BBC media worldwide. Terms & Conditions | The BBC may edit your comments and not all emails will be published. Your comments may be published on any BBC media worldwide. Terms & Conditions |