Down valuation pandemic

Down valuation pandemic

10:47 AM, 26th April 2022, About 2 years ago 1

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Research by HBB Solutions, has estimated that almost half of pandemic property purchases across the UK may have been subject to a down valuation, meaning just shy of 867,000 sales would have hit a snag during their surveys.

Down valuations occur when a surveyor acting on behalf of a mortgage lender considers a property to be worth less than the price already agreed by the buyer and seller. This means that they will not lend the full amount required by the buyer and, as a result, the seller will often need to lower their asking price to proceed with the transaction.

Using the latest data available on the frequency of down valuations within the property market, HBB Solutions looked at just how many property sales will have been impacted based on the number of transactions to have completed since January of 2020.

Welsh home sellers are most likely to see their property down valued with industry figures showing that 63% of all property transactions will hit this pricing snag during their survey stage.

However, in terms of the most pandemic property down valuations, the South East sits top of the table with HBB estimating that 129,394 of the 294,077 homes to have sold since the start of 2020 will have seen a down valuation.

The North West is thought to have seen the second largest volume of down valued property transactions at 118,694, with London the only other region to breach the 100,000 threshold (107,168).

Northern Ireland is estimated to have seen the lowest number of pandemic property down valuations, however, HBB Solutions still estimates almost 27,000 transactions will have been subject to a price reduction by surveyors.

As a seller, a down valuation doesn’t always mean your home isn’t worth what you think. Another buyer using a different lender may agree with the price you’ve set, although this requires repeating the process of finding said buyer to begin with.

As a buyer, if the seller won’t budge you could try a different lender and ask them to carry out the survey. If this fails and the seller refuses to negotiate, you could take out a loan to cover the shortfall, or increase your deposit in order to negate the cost of the down valuation.

Managing Director of HBB Solutions, Chris Hodgkinson, commented: “Down valuations can be an extremely frustrating part of buying or selling a property, especially when both buyer and seller have agreed on a price they are both happy with, only for the sale to be scuppered by a third party opinion.

“Of course, in many cases these reductions are justified but in a market running as hot as we’ve seen during the pandemic, it’s not unheard of for lenders to influence this decision due to their own fears around escalating market values.

“Unfortunately, there’s not a great deal that can be done to immediately remedy the issue other than the buyer coughing up or the seller reducing the asking price. So it’s hardly surprising that many sales, and the wider chains they sit within, can be jeopardised due to a down valuation.”

UK Region Properties Downvalued
East of England 39%
Greater London 59%
East Midlands 27%
West Midlands 50%
North East 43%
North West 56%
Nothern Ireland 50%
Scotland 31%
South East 44%
South West 26%
Wales 63%
Yorkshire and the Humber 58%

Data Tables

Property transaction levels sourced from – UK HPI

Latest down valuation statistics sourced from BankRate

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15:30 PM, 26th April 2022, About 2 years ago

Meanwhile, and albeit in the US, Blackrock and Vanguard are buying up tens of thousands of privye homes, sight unseen, no valuation, and paying 20/50% above the asking price and of course, paid cash on the nail, why?

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