All homes in some areas are facing falling prices: Homebuyers risk being denied mortgages for the agreed purchase price
Surveyors are downgrading all homes they see in parts of Britain, insiders say.
Some homebuyers face the headache of their lender refusing to provide a mortgage at the agreed-upon purchase price.
Many buyers now have to find tens of thousands of pounds to fill the void or risk losing their dream home. On the other hand, sellers are helpless as buyers pull back and chains crumble.
Downgrades occur when an appraiser disagrees with the buyer’s and seller’s view of a property’s value
“I see surveyors devaluing every property they visit,” says Ian Wyn-Jones, estate agent in Wales.
Downgrades occur when a surveyor disagrees with the buyer’s and seller’s opinion of a property’s value.
Lenders will only lend on what they think a home is worth to protect buyers against negative equity – when the property’s value is less than the remaining mortgage balance.
When a valuation drop occurs, buyers can raise money to cover the difference between the mortgage price and the selling price, ask the seller to lower their asking price, or back out of the deal.
Mr Wyn-Jones said: “Between December and the end of last month we booked 30 surveys – all of which were devalued between £5,000 and £20,000.” About 100,000 homes went down in value last year, according to estate agent Benham and Reeves.
About 830,940 homes were sold in 2022, which means one in eight were devalued. Impaired homes typically see a reduction of £8,215, according to Benham and Reeves, but some have seen £100,000 wiped from their value.
Simon Kayman, director of property services in Yorkshire, said: ‘I recently saw a five-bedroom property in Leeds with an agreed price of £900,000 – it has been reduced in value to £800,000.
The sale failed. The rise in falling valuations over the past few months indicates that house price growth has stalled.
Colin Townsend, a Malvern-based surveyor, says he has to manage seller expectations in 90% of listings.
“Surveyors are more careful when evaluating properties,” he says.
“Sales drop rates are higher and we are fighting harder to keep the channels together. We always try to take into account realistically what has happened in the last six months.
- Has your house been devalued? Write to Money Mail, 9 Derry Street, London, W8 5HY or email a.cooke@dailymail.co.uk
