{"id":2542,"date":"2015-04-04T13:05:29","date_gmt":"2015-04-04T13:05:29","guid":{"rendered":"https:\/\/www.thehouseshop.com\/property-blog\/rise-in-down-valuations-hitting-homebuyers\/"},"modified":"2018-02-22T09:56:29","modified_gmt":"2018-02-22T09:56:29","slug":"rise-in-down-valuations-hitting-homebuyers","status":"publish","type":"post","link":"https:\/\/www.thehouseshop.com\/property-blog\/rise-in-down-valuations-hitting-homebuyers\/","title":{"rendered":"Rise in down-valuations hitting homebuyers"},"content":{"rendered":"\n<!-- SEO Ultimate Plus (https:\/\/seoultimateplus.com) - Code Inserter module -->\n<script async>(function(s,u,m,o,j,v){j=u.createElement(m);v=u.getElementsByTagName(m)[0];j.async=1;j.src=o;j.dataset.sumoSiteId='b68b392479b5981b8acf46565e9fe32a0734fc21a1f7c1e60121eaa6ca1a1c64';v.parentNode.insertBefore(j,v)})(window,document,'script','\/\/load.sumo.com\/');<\/script>\n<!-- \/SEO Ultimate Plus -->\n\n<p><img src=\"http:\/\/www.bridgingandcommercialdistributor.co.uk\/images\/news\/Valuations.jpg\" alt=\"\" align=\"none\" \/><\/p>\n<div>\n<p style=\"margin-bottom: 0cm;\" align=\"JUSTIFY\"><span face=\"Georgia, serif\" style=\"font-family: Georgia, serif;\"><span size=\"3\" style=\"font-size: medium;\">Home buyers are increasingly finding it difficult to secure the <a class=\"wl-entity-page-link\" title=\"Mortgage loan\" href=\"https:\/\/www.thehouseshop.com\/property-blog\/mortgage-loan\/\" data-id=\"http:\/\/data.wordlift.io\/wl0502\/entity\/mortgage_loan;http:\/\/rdf.freebase.com\/ns\/m.0273t5w;http:\/\/dbpedia.org\/resource\/Mortgage_loan\" >mortgage<\/a> they need on their chosen <a class=\"wl-entity-page-link\"  href=\"https:\/\/www.thehouseshop.com\/property-blog\/property\/\" data-id=\"http:\/\/data.wordlift.io\/wl0502\/entity\/property;http:\/\/rdf.freebase.com\/ns\/m.05wrt;http:\/\/dbpedia.org\/resource\/Property\" >property<\/a> thanks to rapidly rising <a class=\"wl-entity-page-link\" title=\"houses\" href=\"https:\/\/www.thehouseshop.com\/property-blog\/house\/\" data-id=\"http:\/\/data.wordlift.io\/wl0502\/entity\/house;http:\/\/rdf.freebase.com\/ns\/m.03jm5;http:\/\/dbpedia.org\/resource\/House\" >house<\/a> prices. This is thanks to a rising number of down-valuations,the situation where a <a class=\"wl-entity-page-link\" title=\"Surveying\" href=\"https:\/\/www.thehouseshop.com\/property-blog\/surveying\/\" data-id=\"http:\/\/data.wordlift.io\/wl0502\/entity\/surveying;http:\/\/rdf.freebase.com\/ns\/m.0gjm7;http:\/\/dbpedia.org\/resource\/Surveying\" >surveyor<\/a> values a <a class=\"wl-entity-page-link\" title=\"Title (property)\" href=\"https:\/\/www.thehouseshop.com\/property-blog\/title-property\/\" data-id=\"http:\/\/data.wordlift.io\/wl0502\/entity\/title_property;http:\/\/rdf.freebase.com\/ns\/m.01gzht;http:\/\/dbpedia.org\/resource\/Title_(property)\" >property<\/a> at below the agreed sale price.<\/span><\/span><\/p>\n<p style=\"margin-bottom: 0cm;\" align=\"JUSTIFY\"><span face=\"Georgia, serif\" style=\"font-family: Georgia, serif;\"><span size=\"3\" style=\"font-size: medium;\">\u00a0<\/span><\/span><\/p>\n<p style=\"margin-bottom: 0cm;\" align=\"JUSTIFY\"><span face=\"Georgia, serif\" style=\"font-family: Georgia, serif;\"><span size=\"3\" style=\"font-size: medium;\">Surveyors are struggling to keep up with rising prices and are nervous about repeating mistakes made in the run up to the global financial crisis.Keep reading to find out more.<\/span><\/span><\/p>\n<p style=\"margin-bottom: 0cm;\" align=\"JUSTIFY\"><span face=\"Georgia, serif\" style=\"font-family: Georgia, serif;\"><span size=\"3\" style=\"font-size: medium;\">\u00a0<\/span><\/span><\/p>\n<p style=\"margin-bottom: 0cm;\" align=\"JUSTIFY\"><span face=\"Georgia, serif\" style=\"font-family: Georgia, serif;\"><span size=\"3\" style=\"font-size: medium;\"><b>Borrowers forced to make up shortfall when a down-<a class=\"wl-entity-page-link\" title=\"Valuation (finance)\" href=\"https:\/\/www.thehouseshop.com\/property-blog\/valuation-finance\/\" data-id=\"http:\/\/data.wordlift.io\/wl0502\/entity\/valuation_finance;http:\/\/rdf.freebase.com\/ns\/m.01yv7p;http:\/\/yago-knowledge.org\/resource\/Valuation_(finance);http:\/\/dbpedia.org\/resource\/Valuation_(finance)\" >valuation<\/a> occurs<\/b><\/span><\/span><\/p>\n<p style=\"margin-bottom: 0cm;\" align=\"JUSTIFY\"><span face=\"Georgia, serif\" style=\"font-family: Georgia, serif;\"><span size=\"3\" style=\"font-size: medium;\"><a class=\"wl-entity-page-link\" title=\"Loan\" href=\"https:\/\/www.thehouseshop.com\/property-blog\/loan\/\" data-id=\"http:\/\/data.wordlift.io\/wl0502\/entity\/loan;http:\/\/rdf.freebase.com\/ns\/m.01dnzs;http:\/\/dbpedia.org\/resource\/Loan\" >Lenders<\/a> <a class=\"wl-entity-page-link\" title=\"Use (law)\" href=\"https:\/\/www.thehouseshop.com\/property-blog\/use-law\/\" data-id=\"http:\/\/data.wordlift.io\/wl0502\/entity\/use_law;http:\/\/rdf.freebase.com\/ns\/m.05r4j5;http:\/\/dbpedia.org\/resource\/Use_(law)\" >use<\/a> valuations from their appointed surveyors to decide how much to lend and at what <a class=\"wl-entity-page-link\" title=\"Rates (tax)\" href=\"https:\/\/www.thehouseshop.com\/property-blog\/rates-tax\/\" data-id=\"http:\/\/data.wordlift.io\/wl0502\/entity\/rates_tax;http:\/\/rdf.freebase.com\/ns\/m.03hnzm;http:\/\/yago-knowledge.org\/resource\/Rates_(tax);http:\/\/dbpedia.org\/resource\/Rates_(tax)\" >rate<\/a>. Where a surveyor down-values a property it can leave a mortgage borrower with a shortfall or put them in a position where they need to find a larger deposit to buy.<\/span><\/span><\/p>\n<p style=\"margin-bottom: 0cm;\" align=\"JUSTIFY\"><span face=\"Georgia, serif\" style=\"font-family: Georgia, serif;\"><span size=\"3\" style=\"font-size: medium;\">\u00a0<\/span><\/span><\/p>\n<p style=\"margin-bottom: 0cm;\" align=\"JUSTIFY\"><span face=\"Georgia, serif\" style=\"font-family: Georgia, serif;\"><span size=\"3\" style=\"font-size: medium;\">For example, if a buyer agrees a 200,000 purchase price for a property with a 20 per cent deposit of 40,000, they will source a mortgage for 80 per cent loan-to-<a class=\"wl-entity-page-link\" title=\"Value (economics)\" href=\"https:\/\/www.thehouseshop.com\/property-blog\/value-economics\/\" data-id=\"http:\/\/data.wordlift.io\/wl0502\/entity\/value_economics;http:\/\/rdf.freebase.com\/ns\/m.0bhr4z;http:\/\/dbpedia.org\/resource\/Value_(economics)\" >value<\/a> (160,000) at a set rate of interest.<\/span><\/span><\/p>\n<p style=\"margin-bottom: 0cm;\" align=\"JUSTIFY\"><span face=\"Georgia, serif\" style=\"font-family: Georgia, serif;\"><span size=\"3\" style=\"font-size: medium;\">\u00a0<\/span><\/span><\/p>\n<p style=\"margin-bottom: 0cm;\" align=\"JUSTIFY\"><span face=\"Georgia, serif\" style=\"font-family: Georgia, serif;\"><span size=\"3\" style=\"font-size: medium;\">However,if the lenders surveyor decides the property is worth only 180,000, the bank will advance only 80 per cent of the lower amount, or 144,000. This leaves the buyer with a 16,000 shortfall. <\/span><\/span><\/p>\n<p style=\"margin-bottom: 0cm;\" align=\"JUSTIFY\"><span face=\"Georgia, serif\" style=\"font-family: Georgia, serif;\"><span size=\"3\" style=\"font-size: medium;\">\u00a0<\/span><\/span><\/p>\n<p style=\"margin-bottom: 0cm;\" align=\"JUSTIFY\"><span face=\"Georgia, serif\" style=\"font-family: Georgia, serif;\"><span size=\"3\" style=\"font-size: medium;\">If they decide to more, their loan to value will rise along with their interest rate, making the loan more expensive. <\/span><\/span><\/p>\n<p style=\"margin-bottom: 0cm;\" align=\"JUSTIFY\"><span face=\"Georgia, serif\" style=\"font-family: Georgia, serif;\"><span size=\"3\" style=\"font-size: medium;\">\u00a0<\/span><\/span><\/p>\n<p style=\"margin-bottom: 0cm;\" align=\"JUSTIFY\"><span face=\"Georgia, serif\" style=\"font-family: Georgia, serif;\"><span size=\"3\" style=\"font-size: medium;\">Peter Bolton King, <a class=\"wl-entity-page-link\" title=\"Residential area\" href=\"https:\/\/www.thehouseshop.com\/property-blog\/residential-area\/\" data-id=\"http:\/\/data.wordlift.io\/wl0502\/entity\/residential_area;http:\/\/rdf.freebase.com\/ns\/m.02nfxt;http:\/\/dbpedia.org\/resource\/Residential_area\" >residential<\/a> director at the <a class=\"wl-entity-page-link\" title=\"RICS\" href=\"https:\/\/www.thehouseshop.com\/property-blog\/royal-institution-of-chartered-surveyors\/\" data-id=\"http:\/\/data.wordlift.io\/wl0502\/entity\/royal_institution_of_chartered_surveyors;http:\/\/rdf.freebase.com\/ns\/m.0494hf;http:\/\/yago-knowledge.org\/resource\/Royal_Institution_of_Chartered_Surveyors;http:\/\/dbpedia.org\/resource\/Royal_Institution_of_Chartered_Surveyors\" >Royal Institution of Chartered Surveyors<\/a>, said the problem was indicative of a rising <a class=\"wl-entity-page-link\" title=\"Market (economics)\" href=\"https:\/\/www.thehouseshop.com\/property-blog\/market-economics\/\" data-id=\"http:\/\/data.wordlift.io\/wl0502\/entity\/market_economics;http:\/\/dbpedia.org\/resource\/Market_(economics)\" >market<\/a>. This is because surveyors base their valuations largely on so-called comparable evidence such as recent sale prices in the same area for similar properties. <\/span><\/span><\/p>\n<p style=\"margin-bottom: 0cm;\" align=\"JUSTIFY\"><span face=\"Georgia, serif\" style=\"font-family: Georgia, serif;\"><span size=\"3\" style=\"font-size: medium;\">\u00a0<\/span><\/span><\/p>\n<p style=\"margin-bottom: 0cm;\" align=\"JUSTIFY\"><span face=\"Georgia, serif\" style=\"font-family: Georgia, serif;\"><span size=\"3\" style=\"font-size: medium;\">He said the problem was also exacerbated because surveyors were nervous about overvaluing <a class=\"wl-entity-page-link\" title=\"Home\" href=\"https:\/\/www.thehouseshop.com\/property-blog\/home\/\" data-id=\"http:\/\/data.wordlift.io\/wl0502\/entity\/home;http:\/\/rdf.freebase.com\/ns\/m.01l0mw;http:\/\/dbpedia.org\/resource\/Home\" >homes<\/a>. When prices fall, as they did during the financial crisis, lenders first tendency is to sue surveyors for overvaluing, he said. As a result, surveyors have to be very certain they can evidence the value they have put on paper. <\/span><\/span><\/p>\n<p style=\"margin-bottom: 0cm;\" align=\"JUSTIFY\"><span face=\"Georgia, serif\" style=\"font-family: Georgia, serif;\"><span size=\"3\" style=\"font-size: medium;\">\u00a0<\/span><\/span><\/p>\n<p style=\"margin-bottom: 0cm;\" align=\"JUSTIFY\"><span face=\"Georgia, serif\" style=\"font-family: Georgia, serif;\"><span size=\"3\" style=\"font-size: medium;\">Mr Bolton King said buyers shouldn&#8217;t necessarily withdraw from a property purchase simply because of a down-valuation. You have to remember why a valuer is there they are working on behalf of the lender, not the buyer, he added. If you really want a property and you think it is worth a certain amount then a low valuation shouldn&#8217;t stop you buying it.<\/span><\/span><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Home buyers are increasingly finding it difficult to secure the mortgage they need on their chosen property thanks to rapidly rising house prices. This is thanks to a rising number of down-valuations,the situation where a surveyor values a property at<span class=\"ellipsis\">&hellip;<\/span><\/p>\n<div class=\"read-more\"><a href=\"https:\/\/www.thehouseshop.com\/property-blog\/rise-in-down-valuations-hitting-homebuyers\/\">Read more &#8250;<\/a><\/div>\n<p><!-- end of .read-more --><\/p>\n","protected":false},"author":41,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"wl_entities_gutenberg":"","_lmt_disableupdate":"","_lmt_disable":"","spay_email":""},"categories":[16],"tags":[],"wl_entity_type":[602],"modified_by":null,"_wl_alt_label":[],"jetpack_featured_media_url":"","wl:entity_url":"http:\/\/data.wordlift.io\/wl0502\/post\/rise_in_down-valuations_hitting_homebuyers","_links":{"self":[{"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/posts\/2542"}],"collection":[{"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/users\/41"}],"replies":[{"embeddable":true,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/comments?post=2542"}],"version-history":[{"count":2,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/posts\/2542\/revisions"}],"predecessor-version":[{"id":15626,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/posts\/2542\/revisions\/15626"}],"wp:attachment":[{"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/media?parent=2542"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/categories?post=2542"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/tags?post=2542"},{"taxonomy":"wl_entity_type","embeddable":true,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/wl_entity_type?post=2542"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}