Barclays will no longer allow valuation appeals unless there is more than a 25% gap between the borrower’s estimated value and the value provided by the surveyor. Under this new rule, for example, a surveyor could value a £200,000 house at £151,000 and no appeal can be made. Previously Barclays had no restrictions.
In an uncertain property market and with ‘once-bitten, twice-shy’ valuers, one might expect down-valuations to be on the increase. In fact, down-valuations, where the surveyor values a property at a lower level than the borrower, have fallen significantly since the financial crisis due to improvements in the economy and an increase in the availability of higher loan-to-value (LTV) mortgages. However, they remain a sensitive issue among estate agents, brokers and their customers.
So why does the Barclays Conveyancing Panel Care?
Taking away the opportunity to appeal will increase the chance of the buyer pulling out due to the low LTV. With many conveyancing law firms on the Barclays solicitors panel working on a no-sale, no-fee basis, this could result in a fair amount of legal work being written off. In theory, where a lawyer is
on notice that the purchase is to be funded with a Barclays’ mortgage, they could wait until the valuation is back before conducting the more-expensive elements of the conveyancing process.
Putting matters in perspective, E.surv business development director Richard Sexton suggests that very few valuations get changed on appeal, so Barclays are simply cutting down on unnecessary administration.
“What Woolwich is trying to do is reduce the unnecessary admin and the frustration that the broker and the customer who think that the valuation will get changed on challenge. That is not a great customer
experience,” he commented to Mortgage Strategy.
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