The UK property market is facing a growing crisis as surveyors increasingly value homes below their agreed sale prices, with London and the South-East experiencing the most severe impact. Mortgage brokers report that down valuations are rising sharply, sometimes reaching 10% below the purchase price, causing numerous transactions to collapse and creating significant stress for buyers and sellers alike.
What's Driving the Down Valuation Crisis?
Industry experts suggest that uncertainty surrounding government budget announcements may be prompting surveyors to take an increasingly cautious approach. Jonathan Alvarez Herrera from Ayla Mortgages confirms he has witnessed a definite uptick in down valuations in recent months, particularly affecting higher-value properties in London and the South-East.
Official data from the Land Registry reveals the contrasting market conditions across the UK. While national house price inflation stood at 2.6% for the year to September, London prices actually fell by 1.8% during the same period. Property website Rightmove further supports this picture, noting that budget speculation is creating widespread market uncertainty.
Real-World Consequences for Buyers and Sellers
When a surveyor acting for a mortgage lender values a property below its agreed sale price, the consequences can be severe. Buyers typically face three options: renegotiate the price with the seller, switch to a different mortgage lender for another valuation, or find additional funds to cover the shortfall.
Alvarez Herrera described a recent case where a £3.1 million property was down valued to £3 million. Although this represented a relatively small percentage decrease, the buyer couldn't provide the extra £100,000 deposit required, causing the entire purchase to fall through.
Patricia McGirr from Repossession Rescue, which assists people in financial difficulty, stated that down valuations are turning deals and lives upside down. She reported seeing one London property down valued by a dramatic 17%, describing the current situation as a postcode lottery driven by lender caution and pre-budget jitters.
Which Properties Face the Greatest Scrutiny?
According to Vijay Rabadiya at The Mortgage Vine, most down valuations remain moderate, typically between 2% and 5% below the agreed price. However, he identified that new-build flats, unique properties, and homes in slower southern markets tend to attract the most scrutiny from surveyors.
Other brokers have reported even more significant discrepancies, with valuations coming in anywhere from 5% to 15% below recent comparable sale prices. The Royal Institution of Chartered Surveyors (Rics) clarifies that what's often called a down valuation actually represents the difference between what a property is worth to individual buyers and its true market value.
Rics emphasises that in most mortgage valuation cases, the surveyor's client is the lender, not the borrower, which explains the conservative approach during periods of economic uncertainty. For developers, sellers and prospective homeowners across London, this trend is creating chaos and stress in an already challenging market.
