Undervaluing opportunities

The increasing trend by mortgage surveyors to undervalue a property can play into the hands of landlords looking to drive down the acquisition costs of a new buy-to-let property.

This recent article in EAT highlights the phenomenon where properties are down valued despite both buyer and seller agreeing terms.  This means where a buyer is reliant on a certain sized mortgage they are required to find additional funds to complete the purchase.  The alternative which many landlords can use to their advantage is to push for a price reduction.

In the current climate where properties are failing to sell a prices are falling, many vendors are prepared to compromise on price in light of the views of an RICS valuation report even where the report is not commissioned directly by the landlord but for the buy-to-let mortgage company to saveguard their security.

We have seen as a result of the recent Scullion case that surveyor's valuation have gained greater significance.

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