H2B effect causes valuation headache

Sam Cordon

November 21, 2013

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.”

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