View more on these topics

Valuers are paid to get it right

Richard Sexton 2012

Do your clients a favour and don’t listen to them. At least that is when it comes to their perception of the likely value of their home. 

Overestimated property values are the single biggest cause of delays in the valuation process.  

While we are seeing signs of an uplift in demand, the reality is that these days, any mortgage valuation should be done within two to three days of receipt. 

The problem and delay then arises when the applicant is disappointed with the figure, which may mean the cases can’t proceed or more likely will do so at a higher LTV and hence interest rate.

It’s understandable that this frustrates, but the reality is that applicants are not overly realistic as to the likely value of their own home, on average adding circa 10 per cent to its actual value. And in many cases, this figure is much higher. 

To be clear, this is really only a remortgage issue – it’s rare for there to be disagreement over value on a purchase where there is a clear buyer and seller.

Valuers will always respond to requests for reviews but the reality is that amendments are rare – they are paid to get it right first time after all. 

Lenders are also now becoming more cautious about encouraging such reviews – there is some difficulty in requesting independent advice and then being seen to encourage it to be reviewed.  Importantly, the customer experience for the vast majority of unchanged reviews is also not great- introducing false hope and a delay, with no change to the end outcome. 

There are plenty of available resources to help get an accurate estimate of likely value- brokers can save a lot of heartache and wasted admin by encouraging applicants and advisers to use them. 

Credit scores and legal advice are black and white – all parties will benefit if valuation advice is treated in the same manner.

Recommended

Mervyn King defends FLS after lending drop

Bank of England governor Sir Mervyn King says the funding for lending scheme has achieved its central objectives despite a “disappointing” drop in net lending. Speaking to the Parliamentary Commission on Banking Standards today, King said the scheme had cut the cost of funding for banks and stopped lending levels being much worse than they […]

Letters to editor MS 480

Letters to the editor

One of the comments on Mortgage Strategy Online the previous week described Bank of Ireland’s increase on the differential it charges tracker customers a disgrace. Around 7 per cent of Bank of Ireland UK mortgage customers will be affected by the changes to the interest rate differential, over 50 per cent of which are buy-to-let […]

income protection claimants

Generation Rent

By Denise Wond, Marketing Relationship Manager, Royal London We’ve heard a great deal about Generation Rent in recent years but what does it actually mean for consumers and advisers and has the face of the typical renter changed? The picture is certainly more diverse than it used to be Homeownership has fallen to 64 per […]

Newsletter

News and expert analysis straight to your inbox

Sign up
Comments
  • Post a comment
  • seagull 18th March 2013 at 2:54 pm

    in my experience valuers through esurv are the worst, got many examples of esurv valueing too low than proper surveyor going in for other lenders and valueing accurately. Worst case, client said property worth £125k, valuer from esurv said £75k, valuer from colleys said £120k!! I have defended surveyors before to clients but the comments above just confirm why so many actual surveyors are pompous and aloof, of course valuations on sales are normally confirmed by surveyor, they always like to take the easy route so just confirm purchase price!

  • Phil. 18th March 2013 at 1:44 pm

    I agree with the former comments, i have just had a property value at 90k when the exact same house sold ofr 105k last year, a disgrace.

  • Tom Cleary 18th March 2013 at 11:52 am

    Our experience is that this is not a re-mortgage issue. We are seeing this in the purchase market. Valuers are behind the curve on values in London and when a lender asks for comparable evidence, it has to be three properties that have completed in the last three months. Not an easy task because of lower transcation levels of late. The valuer rarely changes his mind because to do so is a clear indication that he did not get it right at the first time of asking, rather than he was correct in the first place…

  • Steve Lupton 16th March 2013 at 12:49 pm

    I appreciate that valuers are paid to get it right first time but do they?

    When there is a genuine disagreement about a property value brokers are asked by the lender to get comparables . Additional work is carried out getting information about the most recent comparable sales in the area only for the valuer to disregard these.
    When asked for the comparables the valuer has used this is greeted with the answer that these cannot be disclosed.
    Why, if they are confident in their own abilities?