10 August 2009
According to industry experts problems are arising for surveyors when it comes to accurately providing property valuations, and this is because of the fluctuation in property prices.
A number of conflicting reports have been released over recent weeks with some suggesting that property prices are increasing and others indicating that property values have continued to drop.
The Bank of England has stated in a recent report that fluctuation in property values has led to valuation problems, and this in turn is affecting the whole process, causing delays and cancellations.
The central bank said that approvals of mortgages were being delayed as a result of problems with valuations. In some cases it was also leading to cancellations of approved mortgages.
The report stated: “Some lenders and estate agents have reported that this has contributed to breaks in housing transaction chains, so that approved mortgages are more than usually prone to cancellation before lending is advanced”.
Problems were also highlighted in cases where applicants had been approved for their mortgage but were having issues with actually getting the money advanced to them.
One official said: “When prospective buyers are granted a mortgage in principle they are then faced with further difficulties in actually getting the banks to release the funds. A number of NAEA members across the country are reporting complications for homebuyers who have a mortgage approval but are unable to obtain the funds from the lenders. We believe this is due to the banks limiting the amount they are prepared to lend on any given day.”
There is speculation over whether the government will have to extend its quantitative easing programme to further aid the mortgage market, with one official stating: “We believe it is highly possible that the bank could very well ask the chancellor for permission to raise the ceiling on the programme from the current level of £150bn. Meanwhile, we expect the Bank of England to keep interest rates at 0.50% deep into 2010.”
Tags: house prices, house survey, house valuations