Banks and building societies are refusing to lend on about one in five properties because of down-valuations by their surveyors.
But the issue raises fundamental questions: Is it over-valuing by agents or under-valuing by surveyors that is wrecking so many deals? Or is it a mixture of both?
According to Spicerhaart boss Paul Smith, in around 19% of cases, lenders’ surveyors are valuing properties at below the agreed sale price.
This is leading to chains breaking and sales collapsing, says Smith, worsening the stagnation of today’s property market.
“Should we therefore be getting properties pre-valued by surveyors?” asks Smith somewhat provocatively in his column which appears on EYE today.
Just as provocative was an exchange on Twitter yesterday in which agent Jane King remarked on a “further flurry of down valuations . . . Surveyors over cautious or estate agents taking the p***?”
Russell Quirk, of eMoov, countered: “Many agents gratuitously over value just to gain stock. Even in a weaker market which is stupid. Surveyors can over-react too.”
The Property Echo, based in Lincolnshire, then posts up a couple of eMoov properties and asks whether their prices will receive a “40% correction within a fortnight”.
A less than amused Quirk snaps back: “Haven’t you got anything better to do?”
The exchange continued with Property Echo asking: “Will you withdraw/amend your comment that ‘agents gratuitously overvalue’ or do you stand by your comment?”
Meanwhile, news agency Bloomberg yesterday reported that London home owners “are desperately slashing prices”.
The story uses Zoopla figures which show that the percentage of asking prices that have been cut rose in 30 out of 32 London boroughs between last July and this January.
Across the country, says Zoopla, almost one-third of homes listed on its site have been reduced in price at least once.
The biggest average reduction is almost £121,000 in Barnet, north London. The second biggest average drop is Coventry, at £27,320.
Almost half of all properties listed in St Helens (43.7%), Hartlepool (42.5%) and Middlesbrough (40%) are currently marked down.