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UK Mortgage Brokers Report Surge in Down Valuations

In recent weeks, mortgage brokers across the UK have observed a significant increase in down valuations, particularly for remortgages. This trend has been confirmed by lender Gen H, suggesting a shift in the property market landscape.

Key Observations:

  1. Prevalence in Low Deposit Cases: Broker Laura Bairstow notes a definite increase in down valuations, especially for borrowers with only 5% or 10% deposits.
  2. Remortgages More Affected: Katy Eatenton, a mortgage specialist, reports more down valuations on remortgages compared to purchases.
  3. Significant Reductions: Some brokers, like Richard Jennings, have seen valuation reports showing up to 10% reductions in estimated property prices.
  4. Surveyor Skepticism: Gareth Davies from South Coast Mortgage Services highlights cases where surveyors have valued properties below their 2022 purchase prices, despite no clear market evidence supporting such decreases.
  5. Lender Perspective: Peter Dockar, Chief Commercial Officer at Gen H, confirms a gradual uptick in down valuations from a lender’s viewpoint.

Possible Reasons:

Impact on Buyers and Remortgagers:

Down valuations can force buyers to find extra cash, renegotiate purchase prices, or potentially lose deals. For those remortgaging, it may result in less favorable loan-to-value ratios and higher interest rates.

As the property market continues to evolve, this trend of increased down valuations adds another layer of complexity for both buyers and existing homeowners looking to remortgage. It underscores the importance of realistic property valuations and the need for buyers to be prepared for potential valuation discrepancies in the current market climate.

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