An interesting time for the property market
It's an interesting time in the market when valuers are being instructed by lenders on how to value property.
When I first learnt how to value a property we never took into account who the lender was but it appears that in these times of opportunity and uncertainty the lenders are dictating the market.
Just the other day we received a valuation of £155,000 on a property where 5 flats had just sold to owner occupiers for £195,000. A £40,000 down valuation? Are you sure? I say.
– ‘Sorry but that's what I have to do!' the valuer replied.
But you valued two of our other flats yesterday at £195,000.
– ‘But today I'm valuing for Leeds Building Society and they require me to give a repossession value' he said, leaving me dumbfounded.
Clearly the lenders are totally disconnected from the market and have no interest in being reasonable. They simply want to rape and pillage for now, pulling as much profit with as little risk as possible. This would have meant a massive and unacceptable drop in lending potential for that client so we pulled the deal from Leeds immediately.
Unfortunately I would like to believe that it is only Leeds that are playing this game but it's a whole range of lenders. The same lenders that are currently making massive margins. It doesn't matter what Mervyn King says nor the Prime Minister the banks will only lower margins when the competition comes back – something currently being blocked by the FSA until the banks get back on their feet. Happily, this is happening much faster than expected which could prove to be good news for all of us.
To be fair there isn't a thing we can do right now – we just need to wait and watch.
Live with passion,