Home sales in COLLAPSE: Lenders pull the plug after surveyors downgrade values

Lenders are more likely to retract provisional mortgage offers after receiving a so-called down-valuation, if the borrower has a smaller deposit and is looking for a higher loan to value, on the ground evidence suggests.

In other cases, the mortgage provider may still go ahead if the buyer is able to try to secure a discount on the asking price from the vendor.

Properties in London and the South East are typically receiving the highest number of downgraded values, with more homes on the market priced at £1million and above.

Jonathan Harris, director of mortgage broker Anderson Harris, said: “There is changing sentiment; the best in class properties are shifting but we are seeing a number of down valuations from surveyors as caution starts to become more prevalent.

“The mid-market is being less affected by down valuations – it is the £1m-plus market, which is more prone to over-inflated asking prices and down valuations.

“London and the southeast have more properties in this price bracket so the incidence of down valuations is higher in this part of the country.

“Sales are falling through if a buyer is at the limit of their borrowing capacity and loan-to-value with a lender.

“Otherwise, we have seen a willingness for vendors to start dropping asking prices.”

Values of top-end homes in the capital have seen prices plunge by around six per cent over the past year, according to recent estimates by estate agents.

After year of eye-watering growth, sellers are now being forced to be more realistic about prices.

Mr Harris added: “Vendors are beginning to appreciate that their homes aren’t worth as much as they thought so we are seeing price drops in some areas.

“This is ultimately better for everyone as people who need to sell will be able to and those who want to buy will also be able to, resulting in a higher number of transactions and better fluidity in the market.”

Daily Express :: Personal Finance Feed

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