Almost 400,000 residential property sales have been hit by down valuations in the last year, according to the latest research by Benham and Reeves.
The London-based firm applied the latest market data on the number of homes being down valued to transaction levels over the last year and found that an estimated 390,285 homes have been down valued by surveyors working on behalf of mortgage lenders.
The study shows that the South East is the region to have seen the most transactions hit by a down valuation. Of the 137,107 homes sold in the last 12 months, an estimated 60,327 are thought to have been down valued.
The North West has also seen some of the highest levels of value adjustments during the selling process, with 54,043 of the 96,506 homes sold in the last year being down valued.
At 59%, London is home to some of the largest levels of down valued homes of all UK areas and it also ranks third in terms of the sheer volume of transactions with 47,769 of the 80,965 homes sold across the capital in the last year subject to a down valuation.
It is also estimated by Benham and Reeves that the average property across the UK will take a hit of between £5,000 and £10,000 as a result of a down valuation.
The director of Benham and Reeves, Marc von Grundherr, commented: “Down valuations can be a real thorn in the side of those eager to progress with a property transaction but unfortunately they are a prevalent occurrence within the UK property market.
“They often occur due to over expectant sellers setting their asking price too high but we’re also seeing more lenders request a greater degree of caution by valuers in a market where prices are climbing at a rate of knots.”
| Location | Sales vol – last 12 months | Properties down valued % | Est properties down valued – last 12 months |
| South East | 137,107 | 44% | 60,327 |
| North West | 96,506 | 56% | 54,043 |
| London | 80,965 | 59% | 47,769 |
| Yorkshire and the Humber | 72,654 | 58% | 42,139 |
| East of England | 90,408 | 39% | 35,259 |
| West Midlands region | 69,880 | 50% | 34,940 |
| Scotland | 100,671 | 31% | 31,208 |
| South West | 88,741 | 26% | 23,073 |
| Wales | 36,170 | 63% | 22,787 |
| East Midlands | 66,171 | 27% | 17,866 |
| North East | 33,805 | 43% | 14,536 |
| Northern Ireland | 24,691 | 50% | 12,346 |
| England | 736,237 | 44% | 323,944 |
| United Kingdom | 897769 | 43% | 390285 |
| Source | Transactions between May 2020 and April 2021 (latest available) Gov.uk UK House Price Index | Bankrate Devaluation Report | % of down valued properties applied to transactions in the last 12 months |
| Location | AveHP – June 2021 | House price after est down value cost of £7,500 | Est down value cost % |
| North East | £149,521 | £142,021 | -5.0% |
| Northern Ireland | £153,449 | £145,949 | -4.9% |
| Scotland | £173,961 | £166,461 | -4.3% |
| Yorkshire and the Humber | £194,518 | £187,018 | -3.9% |
| Wales | £195,291 | £187,791 | -3.8% |
| North West | £200,222 | £192,722 | -3.7% |
| East Midlands | £226,846 | £219,346 | -3.3% |
| West Midlands region | £231,429 | £223,929 | -3.2% |
| South West | £294,906 | £287,406 | -2.5% |
| East of England | £327,017 | £319,517 | -2.3% |
| South East | £355,948 | £348,448 | -2.1% |
| London | £510,299 | £502,799 | -1.5% |
| England | £284,029 | £276,529 | -2.6% |
| United Kingdom | £265,668 | £258,168 | -2.8% |
| Source | Gov.uk UK House Price Index (June latest available) | Down value cost applied to average house price | Bankrate Devaluation Report |
Comments (10)
Let me just fix that title:
“400,000 homes overvalued by estate agencies”
Am I the only one struggling with the alleged methodology used here?
Or have I just got an oversensitive bull$h!tometer?
It seems that EYE has taken a shine to ‘articles’ of late that are nothing but dubious claims and statistical f***wittery (credit: Jonnie).
Frau Renshaw would have ripped this apart and shown it for what it is – fourth-rate PR puffery.
Agreed not the same since Frau Frenshaw departed. Investigating journalism repleaced by any old story (or advert) by a third party.
Spot on PB. Could not have put it better.
I’ve hardly ever seen this agent with a property to sell except maybe new build housing being resold.
They seem to be aligned with St George as they are constantly in their developments as part of their commercial units.
A lot of it is down to laziness in my view.
Just one example of the randomness we’ve had is that we had one property downvalued based on ONE comparable of a repossessed flat in the same block, three years ago. No account was taken of the fact that this wasn’t a repo, and that the market has bounced forward since then. Luckily we successfully appealed it.
But there have been several others where inexplicable downvaluations have taken place despite a load of comparable evidence that flies in the face of what the surveyor has said, and when we appeal it, the surveyor continues to dig his heels in
And yet we’ve had others which have flown through survey even though they’re a mile over the asking price. No rhyme or reason to it.
Once put to pen, a surveyor will not change the valuation or they risk losing their PI and admit they were wrong.
Not in my experience – we’ve had a few overturned of late.
They must all be using one of those fancy IT valuation tools that knows best.
Only last week a property in my area was down valued £75,000 by a surveyor with no knowledge of the area and due to the pandemic the shortage of sales, getting accurate comparisons is a headache if you are not local. Now the buyer wasn’t happy with the down valuation, just as the vendor wasn’t. Both agreed to a new valuation and guess what, the next valuation, (out of the area surveyor) also came in with the exact same valuation … lightening can strike twice or can it?
If there was any pattern to how surveyors down value i would respect it.
It’s a totally random process.