Surveyors are under the spotlight after a Bank of England report pointed to an increase in the number of property transactions that have fallen through because of surveyors “down-valuing” the property.
The BoE’s quarterly summary of business conditions includes feedback on the economy from 12 regional estate agents. It noted that the down valuations appears to be reflecting concerns about falling prices in the UK property market.
As Surveyor Local reported last week, surveyors apply a number of criteria to their valuation of a house or flat, including comparing it with similar properties sold within the previous three months. In general, the surveyor is likely to ascribe a more realistic value to a property than either buyer or seller wants, usually to ensure the lender won’t be out of pocket if the mortgage holder defaults on payment.
Reflecting wider caution
The central bank’s report also noted the subdued nature of housing market activity in general across the UK, an indication that surveyors may, in fact, be reflecting a wider caution among both lenders and buyers about the property market.
However, it added: “This quarter has seen an increase in mortgage lending activity compared to the previous quarter. Also mortgage commitments increased by approximately £7 billion.
“While buy-to-let lending has decreased as a share of all mortgage lending, loans to the highest loan-to-income borrowers has reached its highest level, as a proportion of all lending, since June 2014.”
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