NAEA: Mortgage lenders undervaluing properties

Posted 12/08/2009

Mortgage lenders in the UK could be undervaluing houses by as much as ten per cent, an industry group has stated.

The National Association of Estate Agents (NAEA) said many of its members have noted a discrepancy between valuations carried out by surveyors and agreed sale prices.

According to the organisation, this is leading to lots of property sales across the country falling through.

Peter Bolton King, chief executive of the NAEA, commented: “Is it fair to value a property based on what might happen in the future?”

He warned that undervaluing properties is forcing many sellers to drop prices, while those who want to remortgage their homes are being left with “little room for manoeuvre”.

Meanwhile, the Department for Communities and Local Government has revealed that in the quarter ending June 2009, house prices in the UK went up by 2.6 per cent.

This followed a 3.8 per cent drop in property values during the previous three-month period.