Repossessions bringing down remortgage valuations

Date:Monday 8th December 2008
Author: Rachel Fletcher

Homeowners looking for remortgages are suffering lower valuations due to increased numbers of repossessions and forced sales.

Energy Reports and Surveys (ERS), the valuation part of conveyancing company LMS, explained to the Independent newspaper that valuers have to take several considerations into account, including the recent selling prices of three comparable properties.

ERS managing director Paul Staley said that since the open market has stalled, forced sales and repossessed homes are being used to calculate averages.

As they are selling for as much as 50 per cent below their peak values, open market homes are suffering falls in valuations by as much as 30 per cent.

Friends Provident head of protection Mark Jones has also noted that people seeking remortgages may suffer from fewer available deals and stricter lending criteria.

Writing on, Mr Jones also said that people with faulty credit records and smaller deposits would find the situation particularly problematic.