Properties in Wales hit hardest by cheaper valuations – with sellers losing over £8,000 | Personal Finance | Finance
Welsh sellers are the worst hit by down valuations in the current property market, new data suggests.
The latest research from quick sale specialists, Open Property Group, found sellers in Wales are most likely to face a “down valuation” with the average properties valued around £8,149 less than the asking price.
Open Property Group analysed the estimated percentage of down valuations across each region of Britain compared to current market values.
The aim was to find out how much sellers might be impacted during the home selling process if their surveyor and agent disagree on the market value of their home.
According to platform Estate Agent Today, down valuations are rising and causing significant challenges for both homebuyers and sellers. This adds to the difficulties of navigating an uncertain property market amidst higher mortgage rates and declining house prices.
Across wider Britain, the average property subject to a down valuation is being revalued to the tune of 2.8 percent, which equates to £7,290 on the current average house price.
While Wales is currently hardest hit, down valuations are also coming in above the £8,000 threshold in the West Midlands (£8,143), the South West (£8,075), Scotland (£8,035) and the North West (£8,017).
Despite being home to the largest percentage down valuation at 4.8 percent, sellers in the North East are seeing the smallest monetary reduction in the value of their home during the surveying process, with a reduction of £7,498.
Jason Harris-Cohen, CEO of Open Property Group, commented: “Down valuations are an unfortunate part of the home selling process and they seem to be rearing their head once again, with lenders keen to safeguard themselves in what continues to be a tricky environment with respect to the cost of borrowing.”
What is a down valuation?
When a buyer applies for a mortgage, their lender sends a surveyor to value the property. If the valuation is lower than the agreed price, it results in a down valuation.
This means the lender won’t provide the full loan, requiring both parties to reconsider.
According to Open Property Group, down valuations can occur due to overestimations by estate agents or as a precaution by lenders in uncertain markets.
Sellers usually must agree to a price reduction, find a new buyer with a different lender, or address issues raised by the surveyor.
Buyers can seek a second opinion from another lender and surveyor, renegotiate with the seller, increase the deposit, or secure additional funding.
Mr Harris-Cohen said: “As a seller, it can be extremely frustrating when a lender doesn’t see eye to eye with you, especially after you’ve already gone through the lengthy process of securing a professional valuation from an agent and have accepted an offer from a buyer.
“Unfortunately, there’s not a great deal that can be done other than taking the hit, or repeating the process of finding another buyer, which can drag on for weeks on end, particularly in current market conditions.
“It’s a common story we see with many sellers opting to use our quick sale service and in doing so, we allow them to bypass the delays, stress time and effort associated with a down valuation, providing them with a concrete selling timeline so they can focus on their onward purchase.”
