Lenders undervaluing properties, claims NAEA: The National Association of Estate Agents certainly went for it yesterday when they published their report criticising lenders for deliberately undervaluing properties.

Whilst the report was very restrained when compared with the conversations I have with some estate agents, (now that would have been a more interesting report), I’m sure the sentiments and frustrations are shared.

NAEA members believe that mortgage lenders could be deliberately undervaluing properties by as much as 10 per cent causing sales and remortgages to fall through.

So here’s a snippet: “Whilst I understand that lenders are operating under severe constraints, it is neither fair nor ethical for valuations to be lowered on the basis that it might reduce exposure to competitive loan rates.”
So the two important points for us are:

1.  Down-valuations on purchases are breaking house chains and causing more drop-outs.

2.  If you are remortgaging your current property then the lender’s valuation can have a dramatic effect on what rate you are subsequently offered. For more examples, see Tip of the day below.