This from the Daily Mail made me think this week !
The most recent figures from Nationwide say house prices rose one per cent last month, and are up more than ten per cent in the past year.
Halifax says they're nearly seven per cent higher than a year ago, while the Royal Institution of Chartered Surveyors is predicting a post-Election bounce, with modest increases expected across most of the country in the next three months.
But mortgage borrowers say this good news isn't yet being reflected in the prices that valuers put on their homes, and that low valuations are jeopardising their chances of getting the mortgage they want, or of moving home.
A typical example is a reader from South London who paid £176,000 for a house four years ago. After spending £24,000 on improvements and getting three estate agents round, the house was valued at between £200,000 and £216,000 in February. But when the owners tried to remortgage last month, their bank's surveyor put a maximum price of just £160,000 on it.
The couple have a £155,000 mortgage so were rejected for their bank's best-buy fixed rate because it is on offer only to people with at least 20 per cent equity in their homes.
They're now paying the bank's standard variable interest rate and are worried that they will not be able to afford the repayments if interest rates rise - and that if they try to sell, a low valuation will mean potential buyers will not get a mortgage either and will have to withdraw from the deal.
Experts say low valuations continue to plague the market and that victims may struggle to overturn them.
If your lender just did what's known as a "drive-by" or " desktop" valuation and you think an internal inspection will produce a higher figure, you can ask for them to send someone round,' says David Hollingworth, of broker London & Country Mortgages.
You may be charged a few hundred pounds for the new inspection and there are no guarantees it will produce a higher figure. If you are unhappy after a proper internal inspection, you can try appealing against it by finding examples of similar local homes that have sold for more in recent months. Most lenders require details of at least three comparable homes.
'Unfortunately, this can be a struggle if the number of transactions taking place in your area is low, or if your home is particularly unusual,' says Melanie Bien of broker Savills Private Finance.
Websites such as www.houseprices.co.uk can also help by giving actual 'sold' prices for most postcodes, while the Home Valuation Calculator at www.thisismoney.co.uk shows how your home's value may have changed over different time periods.
You cannot expect high valuations from estate agents to carry much weight with lenders. They assume that agents overvalue homes to try to win business from sellers.
As there is no conciliation or independent ombudsman service for people unhappy with low valuations, the odds are you will have to accept the price your lender puts on your home.
If it's so low that you don't qualify for one of its best-buy deals, you may need to look elsewhere if you don't want to stay on its standard variable rate.
Rates may be high, but lenders that will remortgage high loan-to value properties include the Post Office, Halifax, the Clydesdale/ Yorkshire Bank, NatWest/Royal Bank of Scotland and LloydsTSB.
Shop around carefully out there folks, locally I know of both lenders and surveyors who will value properties VERY differently - Do your homework before you instruct or apply, it will save you time and hassle in the long term.
Until the next time.
Mr J.
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