There has been a ‘significant’ rise in down-valuations which are now running at the highest rate since the crash in 2008.
The Victoria Derbyshire Show yesterday looked at the problem, with Russell Quirk one of the contributors.
Quirk, CEO of Emoov, said that one in five of its transactions is currently being down-valued by surveyors after the sale has been agreed.
Two years ago, it was fewer than one in 20.
Quirk said it reflected surveyors predicting a crash, and that they were covering their backs.
He said: “”Surveyors are prophesying a crash. The system is built to protect them.”
Mortgage firm London and Country told the BBC show that the number of its advisers seeing down-valuations on a daily basis now exceeds those who do not.
Notably, Quirk said that the RICS did not put anyone up for the programme, although surveyor Nick Hanson of Vospers did appear in a private capacity.
Other contributors to the programme included Jonathan Hudson, of Hudson Properties. He denied agents were over-valuing properties, saying there would be no point in having properties on the books if they were not going to sell.
A couple of first-time buyers also told the programme of their experiences. They had a down-valuation of £10,000 on the first property they tried to buy, and lost out when the seller refused to drop the price.
A second property purchase was also hit by the same down-valuation but this time they borrowed £5,000 from family members to save the deal.
A home owner looking to remortgage after renovating his property told how a surveyor valued the house at £20,000 less than a local estate agent. The surveyor had not gone inside the property but had done a drive-by valuation.
Trade body UK Finance 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.”
After the show aired, Quirk told EYE: “Surveyors are being over-cautious and pessimistic on property values currently because they are concerned that lenders will call upon their indemnity policies for losses.
“Self-interest rather than accurate market reflection, in other words.”
He said that of the one in five deals being hit by down-valuations, some resulted in fall-throughs and others in re-negotiation to get the seller and buyer to compromise.
Comments on the BBC forum included a question about what was making lenders nervous – Brexit?
Another said: “House prices are way too high relative to earnings and the bubble must burst at some point. And that may be soon.”
The segment on down-valuing can be viewed via the link below, one hour and 11 minutes in.