With house prices on the up and what appears to be a recovering market could we finally see a return to the glory days? Some surveyors think otherwise....
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div>With house prices on the up and what appears to be a recovering market could we finally see a return to the glory days? Some surveyors would have us think otherwise.
In the last month a colleague and I have had surveyors very nearly prevent applications from proceeding as they apparently didn’t feel the market had improved in the last two years, one of them in fact felt that things in London have gotten worse.
Being a surveyor can’t be an easy job, you are effectively putting your name to a report that could be relied upon should there be a dispute further down the line. This we all understand and appreciate, but there is a big difference between being conservative, and outright getting it wrong.
In one example we provided two historic valuations that had the market value above the recent report, in addition various sold comparables were provided that clearly demonstrated a much higher asking price PSF than that given by the surveyor.
Now, a valuation is very much a matter of opinion and we can always find valuations to justify a figure on a report, however most lenders will not, or cannot instruct another professional to get a second opinion because of the implications it has on their ability to put in a claim. As a result of this we find ourselves in a position where a single man or woman’s opinion can completely destroy a loan application, even if they are completely wrong.
We are not expecting a lender to have three valuations and take the highest one, what we need is the ability to instruct a separate, independent qualified professional to provide a second opinion in light of overwhelming evidence in favour of a higher valuation. The flipside to this is that what if the second surveyor gets it wrong and the first one had it right?
There is no perfect solution but surely our clients, and us as brokers, cannot be entirely at the mercy of a single person who will decide whether or not the deal happens, even if it is quite clear they have got it wrong.
It’s a tricky subject but one I feel warrants some thought. We were fortunate enough to have a lender that realised the figure on the report was wrong and they proceeded at a higher LTV. Not all clients have this luxury; many find themselves having to scrape together more cash, raiding their savings or missing out on their dream home as a result of a significant, albeit unjustified down valuation.
Nobody wins in these circumstances, the lender misses out on what would be a strong application, us brokers miss out on our commission and the clients do not get the funding they need. The surveyor however still gets paid.
This is not intended to be a surveyor bashing blog, for the most part they do a great job and have rescued many deals by being swift and efficient. However, the fact still remains that relying on a single person’s opinion without the option to get a second one, if it is apparent they are wrong, is an issue that continues to plague our industry.
By Andy Jacovou, New Business Consultant, Bridging & Commercial, Brightstar Financial
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