Down valuations on the up –
but not at Black Brick
For some buyers, it can be a nightmare scenario: a price is agreed
on their dream property, but the surveyor’s report comes back
with a valuation below the asking price. The result? The lender
refuses to provide finance for the full amount, leaving the buyer
scrambling to cover the difference, or watching the deal fall apart
– with the buyer out of pocket on survey and legal fees.
According to recent data, the number of so-called ‘down
valuations’ has risen in the past two years from one in 20 to one
in five. This is the highest rate since the financial crash in 2008,
according to agents from 10 mortgage adviser groups contacted
by the BBC’s Victoria Derbyshire programme.
In the current market, this can be a particular issue for buyers
purchasing off-plan from new developments. These transactions
usually involve the buyer paying 10-20% upfront, with the
remainder due at completion, often two or three years after the
price is agreed. This raises the risk of price falls meaning that,
when the buyer comes to arrange their mortgage, the lender
declines to extend a loan that covers the full value of the property.
However, this rise in down valuations has not been something
we’ve seen at Black Brick: we have not entered into a single
transaction for our clients in recent years where a survey has
returned with a valuation revised downwards.
“Coming to an accurate valuation for a property is incredibly
difficult for a buyer, especially in the present market,” says
Camilla Dell, Managing Partner at Black Brick. “But it can be the
difference between securing a mortgage and seeing the deal fall
through.”
Too often, estate agents are desperate to get sellers on their
books, and are prepared to inflate valuations to do so. In a market
where limited supply can generate intense competition for good
properties, it’s easy to agree on an asking price that doesn’t stand
up to professional scrutiny.
“The Black Brick process involves a much more holistic
assessment of a property’s value than is possible using public
information, such as that on Zoopla and similar websites,” adds
Dell. We have access to more up-to-date information, and form
a view based on the nuances of location, aspect and condition of
nearby properties that have recently been sold.
“This provides comfort to our clients that they’re getting what
they are paying for, and demonstrates the value that professional
representation can generate,” she adds.
For further information please contact Black
Brick on Tel: 020 3141 9861 or visit
www.black-brick.com
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“The Black Brick process
involves a much more holistic
assessment of a property’s value
than is possible using public
information, such as that on
Zoopla and similar websites.”