New-build valuers must change habit

1 March 2010

As part of a recovery in the housing market, we are seeing improvement in the new-build sector.

New-build suffered disproportionately during the credit crunch because it was hit not only by the slowdown, but also by a serious loss of confidence by lenders and purchasers.

Developers were an easy target for people to blame, but valuers were also to some extent culpable for sometimes neglecting to challenge received wisdom.

Relationships are looking healthier, though developers that continue to refuse valuers access to sites are undermining their own credibility. Longer term, the sector is one to support.

The population is growing as are single occupancy rates, which increases demand for new homes.

There were 200,000 new immigrants last year, but only 100,000 new homes were built. This must have a long-term effect on prices. But short term, the sector could slide further than the rest of the market if the gap between hope and reality widens once again.

I despair when I hear that some firms are giving developers sympathetic valuations in return for being considered for work.

One can’t blame developers for taking advantage of this, though I hope common sense will drive a change of behaviour before we start the unproductive cycle of overvaluation again.

If the valuers involved develop a reputation for being willing to work in this manner, they will no doubt benefit in the short term too.

Readers' comments (10)

  • Anonymous | 10 May 2010 9:26 am

    I am currently in the process of buying a new build property and have an example of where x2 different valuations were provided by the same surveyor for identical properties only because the lender was different. Would appreciate any help with what i can do in this scenario to avoid paying a overvalued sum for a property.

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  • Anonymous | 10 May 2010 9:53 am

    Anonymous | 10 May 2010 9:26 am
    We have had a similar situation where a property was valued differently for 2 lenders. Ours was not a new build but was valued twice, within 2 weeks with a difference of £25,000. The valuers were from the same office of the same firm. When questioned we were told it was due to the market, but having pointed out that a 30% increase was unlikely in less than a month we were referred to a region manager. The conclusion was that the valuers can only give their opinion, and as a result the lower valuation would stand.
    If yours has been done by the same person you may have a case, otherwise I wish you luck with any action you take

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  • Anonymous | 10 May 2010 4:00 pm

    My was done by the same person. Is there anywhere this sort of practice can be reported?

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  • Anonymous | 11 May 2010 10:38 am

    I would speak to a regional manager from the valuers initially. If no joy there then speak to a national manager. If all else fails then I would contact the regulatory body for the valuer such as FRICS. The valuers qualification should be noted on your valuation report. There can be no justification for a valuer to value diferently for different lenders. The property is worth whatever it is worth regardless of who is securing against it. Unless there have been material changes, or market changes then I would challenge it.

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  • Anonymous | 11 May 2010 11:25 am

    The reason for the difference is not necessarily the valuers fault, but the instructions from the different lenders. Some lenders require new builds to valued second hand, some minus the incentives etc etc. Also, no two properties are ever identical, including new builds and layout, design etc can impact on the valuation. I suggest you try to find out the lender's policy before you start making complaints about the valuer.

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  • Anonymous | 11 May 2010 11:48 am

    Any valuer should provide a valuation as it stands, with any lender specific information such as new build value within 12 months, or 90 day value clearly defined in addition to the market value. A market value is not determined by the lender, although different lenders will have different criteria. If the same valuer has valued the same property with 2 different values then there needs to be a valid reason.

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  • Anonymous | 12 May 2010 10:38 am

    The valuation obtained by the lender is for mortgage purposes which is not the same as market value. The valuer is required to value in line with red book taking account of lender requirements. Therefore the valuer can value a property differently for different lenders. Don't blame the valuer, as suggested on the other comments, find out from the lender what their policy is with regards to new builds.

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  • LondonJohnny | 12 May 2010 10:54 am

    Why complain about the survey? It doesn't matter how much the valuation came to, just pay what you think is right!

    Don't complain about the survey, they are already down valuing most properties, due to that I would say don't bother complaining, the more you complain, the more pitfall you leave for other buyers and sellers as they seem to down value properties a lot.

    So please stop moaning and pay what you think is right. The valuation report don't matter as long as you can get a mortgage.

    Thanks
    Good luck

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  • Anonymous | 12 May 2010 1:14 pm

    The valuation should show market value with any specifics mentioned elsewhere. Market value is not defined by a lender buy by the market, hence the term

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  • Wild Bill | 12 May 2010 2:33 pm

    There is no such thing as a downvaluation.

    It's called a realistic re-appraisal. Just because your property didnt get what YOU think. YOU are not the expert.

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