Conspiracy theory – just what are surveyors playing at?

One area where there is undoubtedly room for major improvement and a reassessment of how the whole process works is around valuations. To say that the situation is currently odd at present would be an understatement and the sheer number of down valuations we are getting – almost every other case – almost leads you to suspect some sort of conspiracy.

We are not Woodward and Bernstein, and this definitely isn’t Watergate, but if someone was going to delve a little deeper (throat) into what is happening, we wouldn’t be surprised if there was a story to be told here.

Are surveyors being placed under pressure to value, shall we say, conservatively at present? How else might you explain some of the cases we’ve had to deal with recently.

For example, there’s the house valued at £600k four years ago when the occupants took out an equity release plan, who erred on the side of caution this year and put the value at £650k – although the agents valued it higher – which has just come back valued at £550k. £50k less than it was valued four years ago in a rising house price environment? How does that work?

On a different scale we also had a down valuation from £365k to £355k based on comparables with other homes. However, a shortage of supply means a shortage of comparables. Properties in one area are being compared with those over 12 miles away simply because they are the closest ones on the market with the same number of bedrooms. This can’t be right.

Such an approach will also make a nonsense of the introduction of more 95% LTV mortgages, because once the surveyors get their hands on them, a down-valuation will mean the purchaser won’t be able to access those higher LTV products anyway. Currently, clients are finding a way but no-one can think this is a normal situation. This is not caution for caution’s sake – it smacks of something much larger than that.

Think of what we had a year ago. In April 2020 – and we appreciate that this wasn’t possible for a number of lenders – we had efficient desktop and AVMs that presented the valuation data quickly and seemed utterly in keeping with the property and its place within the local market.

Now, we have what seems like the opposite. A far slower valuation process which repeatedly brings back values that seem to have no truck with reality and an other-worldly feel to the whole process. We have down values that produce a huge amount of extra work for all concerned, even on properties where the LTVs are ultra-low and the chances of the lender having to ever possess are remote in the extreme.

Is this self-preservation? Is this guarding against a tech-led future? Is this pressure from above? We think we deserve some answers because we are currently disappointing large numbers of clients based on an interpretation which seems utterly out of keeping with local housing markets.

We would suggest that few people in this country don’t know the true price of their house within £1,000. Demand is huge at present and we come back to the old adage of a property being worth what someone is willing to pay for it. So, why do we keep getting properties down-valued in an environment which has no need for it? Answers should definitely be forthcoming because no-one comes out of these situations looking good.