Undervaluing is back

The BBC reports that undervaluing is back.

This is where mortgage surveyors refuse to value a property for the agreed sale price. The result is that where a landlord is funding the purchase using loan finance they will either have to pay the additional shortfall or not proceed with the deal.

Landlord insurance = discounted rates = instant quotes

Properties are typically being undervalued by at least 10%, said the National Association of Estate Agents.

It said mortgage surveyors are afraid of being sued by lenders and were being overcautious in their valuing as a result.

The result of this potential undervaluation is that property deals will not proceed and that house prices recover less quickly as over cautious valuations continue to suppress house prices despite purchasers being prepared and able to pay prices which would lead to house price rises.

Have you been the victim of an undervaluation? Post your experiences below.

Free property management software, Free tenancy agreements