Mortgage surveyors down-valuing properties

[FabulousSophie]

There is an article in today's Telegraph saying that mortgage companies have started to refuse to lend on the agreed purchase price of a property because it is based on an estate agent's over-valuation in the current stagnant market. Has anyone started to experience this yet?
www.telegraph.co.uk/news/2018/07/28/rise-homes-valued-blamed-estate-agents-overpricing-properties/

Nope, survey done 3 weeks ago, SW London and mortgage was agreed at sale price and have now completed.

But we priced reasonably as wanted to sell and I think our buyers thought they were getting a bargain in our area but compared to what we paid 7 years earlier I'd have to disagree.

MindMyOwnBeesSlacks If you priced realistically and sold quickly, I doubt a mortgage surveyor would have any worries about the agreed sale price. It is probably the agreed price of properties that do not sell quickly that mortgage lenders are worried about. If they need to repossess and sell, they would presumably be unlikely to get their money back in a hurry, or in full.

No we paid full (reduced) asking price and survey agreed. There are some properties on the market clearly substantially overvalued though and quite a few reappearing on the market.

The property we’re buying had buyers willing to pay £20k over what we’re paying, they were first time buyers and the sale fell through, aparantly due to the survey but our survey’s had nothing massive on it. I’m wondering if their lenders wouldn’t pay out at the agreed asking price as apparently there was a bidding war previously and it went way over asking price, especially since our offer (under asking) was accepted immediately so as not to spook the chain. Our lenders valued it at exactly what we’re paying.

I've been in the industry my whole adult career and this has always happened when appropriate it's nothing new although with prices seemingly sky high (at least where I am anyway) it may seem more common now.
EAs do not give anyone a valuation, they provide a market appraisal and give advice on a price to market the property and aim/ask for.
The surveyor is able to give an actual valuation and if it is below the agreed price will advise their client (buyer or lender) on this, with anticipated falls in the market and uncertainty in the economy down valuations are more likely as the lenders are advised on market conditions which are likely in the coming years to ensure their investment is protected.

RunAwayGroom In the article, mortgage companies are blaming EAs, and EAs are blaming mortgage companies for sales falling through. Apparently a third of sales are falling through at present, which is an all time record. Perhaps this is the cause of that huge increase.

IndianaMoleWoman It is amusing how before you came along a fantasy bidding war was taking place, in which buyers who could not afford to buy were bidding against other buyers who also could not afford to buy. And the sellers were probably feeling happy because they had 'sold' for more than asking to buyers who could not afford to pay.

If the surveyor downvalues the property then you offered too much... the surveyor is saving you money

Well they could probably afford the repayments but the mortgage company wasn’t prepared to buy it for a high price. Presumably everyone has access to prices paid but mortgage companies must protect their investments!

I work in conveyancing. I haven't had a down value for ages, and the last one was justified and nothing to do with the housing market as such, there was a major fault with the property.

Yes. Our house was on at £220 in January this year. Accepted £208. Mortgage valuation said £165! It's a 3 bed and you can't buy a 2 bed around here for that! Buyers found a new mortgage lender in May who valued it at the price they needed so the sale is back on.

Wow blinkin that is quite a difference... take it the first surveyor wasn't local

2 below is in the chain had £10k knocked off by mortgage valuation. Our buyer have absorbed this to keep the chain.

Our lender was willing to lend on our purchase, which I think is overpriced for the road (by £200k on Zoopla!), but I suspect they feel they’re investment is protected as we are “only” borrowing 60% of the value of the property.