Has Brexit reduced our property value?
Surveying Advice questions and answers
Hello. I am currently selling a property and was close to exchange when my buyer instructed a last minute homebuyers survey. The survey valuation down valued our property by 15K despite no structural issues, citing brexit as a cause of decreasing property values. Mortgage valuation was fine and the buyers mortgage had been fully approved. Do we have to accept this new valuation? Is Brexit an acceptable reason to reduce our property value? Should we instruct our own independant valuation?
May i start by reminding all interested parties that a property is only worth what one is willing to pay, (evidenced through historic sales data).
Residential Property Valuation isn’t an exact science and Lenders general acknowledge this by allowing a variance of up to 5% of the agreed Purchase Price, (PP).
Therefore, if the vendor’s property was £300,000 a lender appointed valuer might be willing to round up his/her valuation, if it was no less than £285,000. (It would have helped if we knew what percentage £15K was of the agreed Purchase Price.)
Shortly after Brexit a number of Valuers ceased ‘rounding up’ and or devalued property to allow for an anticipated drop off in property values. However, about a month or so after polling day many of the major primary lenders issued guidance notes requesting that comparable evidence used to ascertain property values avoid speculative comments regards Brexit.
I am not convinced a third valuation would help resolve matters, (particularly if the difference between the first and second is within 5% of PP) so i would recommend the following actions:-
1. The Purchaser request a copy of the comparable property evidence produced by the Lender’s Valuer.
2. Issue this to the Home Buyer Report surveyor, asking if he/she is willing to review and revise his/her valuation.
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Really quick turnaround and communication from them was fantastic with a thorough and detailed easy to understand report as a result.
Adam on 25/01/2023