Warnings of financial crash as number of down valuations increase

Warnings of a financial crash have been circulated by estate agents Emoov following a significant rise in homes being valued at less than what buyers have agreed to pay.

The so-called “down valuations” can mean buyers having to pay thousands of pounds extra, up front, to avoid the sale collapsing.

This happens when lenders value homes below the sale price.

According to mortgage advisers London and Country the number of its advisers seeing down valuations on a daily basis now “outweighs” those who do not.

One in five of its sales now resulted in a down valuation. Two years ago, it was fewer than one in 20.

This is the highest rate since the UK’s financial crash in 2008, according to agents from 10 mortgage adviser groups contacted by the BBC’s Victoria Derbyshire programme.

UK Finance, which represents the banking industry, said: “Lenders have a responsibility to ensure that the value of property taken as security on mortgage loans is current and realistic.

“Although the valuation is carried out for the lender, borrowers also benefit from a realistic independent valuation as it could help them avoid paying over the odds for the property they are buying.”

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