Low valuations hold back market

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 seller 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. 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.