H2B effect causes valuation headache
Concerns were raised at the Council of Mortgage Lenders valuations conference today that prices of new build homes were rapidly shooting up to a level that would not be sustainable.
An example was given of a development of new build properties which were originally priced at £135,000 in June 2012 but were re-priced at £156,000 between June and October this year.
Chris Rispin, director of technical services at Allied Surveyors and Valuers, said : “We can’t prove it but Help to Buy came along at that time and it may have influenced those prices which were put on the property.
“The valuer has got a real challenge in trying to deal with that.”
Rispin said there needs to be a partnership between lenders and valuers in recognition that this is not a straight forward issue as it was very unlikely that the property would maintain the value of £156,000 two or three years down the line.
He added: “There are problems here that need to be dealt with. We will do the best we can to provide a figure in that circumstance but there it is not a simple process.
“By their very nature incentives are not repeatable consequently there is a risk of a premium element to the pricing which questions sustainability.”