Surveyors are facing a rise in the number of court actions brought by lenders over valuations they made before the housing market crashed in 2008. Countrywide alone is expecting to pay up to nearly £12m in claims.
The increase in cases has led to a near doubling of their insurance premiums.
Research carried out by The Daily Telegraph revealed that Countrywide, the UK’s largest estate agency chain, faced 35 writs in the High Court last year from mortgage lenders including Barclays and Bank of Scotland. The paper says a further 12 writs have been filed this year, with five in March alone.
The issue at the heart of these claims, says the Telegraph, is the valuations surveyors put their names to in the lead up to the housing crash.
“While prices were rising, no one contested the valuations. When prices started to come down, lenders looked to see if they could pin the liability on surveyors.
“For that reason a lot of the claims date back to valuations undertaken prior to 2008. With these types of claims normally subject to a six-year limitation period, the clock is counting down.”
Gary Head, underwriting director at insurer Hiscox, told the paper: “There are potentially a lot more claims against these companies to come through the pipeline as more properties are repossessed and financial institutions realise their losses.”
In a statement, Countrywide said: “Over the last couple of years, the recession and the fall in house prices has led to a rise in claims throughout the industry.
“It is not uncommon for any professional business to place reserves for any potential future claims and Countrywide’s position as the largest in the industry reflects the size of the reserves.”
In its accounts, Countrywide made a charge of £11.9m in 2010 against an “abnormal increase in the number of indemnity claims”.
Other surveyors such as Savills and Knight Frank are also reported to be facing claims.
The Telegraph quoted “one leading surveyor who asked not to be named” as saying: “Lenders are feeling their way through the market, testing out where the weak spots are. The issue for surveyors is that when a bank wins one of these cases they tend to pursue a whole raft of other ones against the same surveyor in the expectation they will continue to win.”
Comments
@PeeBee
Those comments are all from the hoi polloi.
A more exacting standard should be expected from an Estate Agent on an Estate Agent forum; clearly writing rubbish should not be countenanced.
Ian: "Idiot comment of the entire thread."
Nah - I disagree. Look closer and you will see absolute gems such as:
"Shouldn't this read - 'Claims pile in against over-valuing by Estate Agents'....."
"I too think common sense is a virtue and it is for that reason I would not touch property with a barge pole... I will buy when I choose to..." (so - common sense comes and goes, does it?)
"Now you to can sue a surveyor for buying an overpriced property."
You just didn't look close enough - did you?
"@Simon if a property is over valued then it will not sell, if it does sell then it is not over valued as a buyer has decided to buy it and a value has been set as a result."
Idiot comment of the entire thread.
Did you actually read what the article was about? You know, the one where surveyors are being sued because houses have been over valued?
Ric - you are spot on but what Brit 1234 seems not to realise that whilst people may claim they hate the way EAs supposedly push prices up, Joe Bloggs wants a piece of that action when selling.
That's why they use an EA and the more bad publicity Brit tries to give us for doing our job the more Joe Bloggs will use us.
Anna comment is very valid, as is PeeBees of freedom of speech in reply to:
"Could EAT not introduce a min age so all the silly children (HpC muppets) who blight the site with endless rubbish to show how clever they are to mummy, cant get on? Or make the sum harder???"
This thread has moved off topic, any sensible post that can only be described usefull is lost in annoying rubbish. Those with a business to run, don't have the time to wade through it.
Incidently the HPC brigade arent getting their messages through as many an agent knows who they are now and just bye-passes the posts without reading. I suggest other do the same.
Come on EAT where is your moderator. Your in danger of loosing the people you say you represent, that should please your advertisers.
Ric - Absolultey right.
Funny thing the view of some on EA's on this website....it really is......
We are asked to get the best price possible for a vendor, full stop simple as that nothing else....you dont see many non EA's on here saying that Bloody agent got me more than I wanted for my house, the sod, I would never have used the optimistic "burton suit wearing lad" if I had known he would do what he said he would do and better!
We acheive that goal ie get a price whatever it may be.....and the valuer (surveyor) for the bank then visits the property to make a decision on whether or not he/she feels the price being paid or amount borrowed is in their opinion the correct price......he/she has a chance to agree or disagree!
The EA has done his job as prescribed to achieve the best possible price for the property and client.
Now then EA's what ever you think, do not make buyers buy, buyers have a choice, they buy if they want to and dont if they dont (we have Brit1234 as proof of this, he will be looking for the next 30 years) unless you are suggesting EA's make people buy houses (please tell me your not) It seems like any non EA calling agents on here is after one and one thing only "self gain by way of ultra low prices"
This point on suing the surveyor I think is a little harsh......after all valuing is a "Snap shot" of a moment in time using the information available......so can I make a claim against the surveyor who valued my last house for the purchaser as I sold it for much less in 2005 than it is worth today!
This website is great for listening to views from non EA's, EA's and certain HPC advocates who bring rational thought behind their comments, BUT how boring is this Blame the EA,
@Simon if a property is over valued then it will not sell, if it does sell then it is not over valued as a buyer has decided to buy it and a value has been set as a result..
Now you to can sue a surveyor for buying an overpriced property.
http://www.neglectassist.com/page/surveyors_valuers_negligence.html
lol, no mention of estate agents valuing ;)
Sorry the last post was @BBB....Brits Big Brother?
Not the Oxford version but a meaning nether the less! You can search it for yourself....;>)
Mug.........................
Brit slang for a gullible person!
and/or
a mug's game is considered a worthless activity!
Both could be associated to someone thinking the world will follow their wish and waiting for something to happen that may never happen and probably will not happen.
Any good?
Brit, I have said this to you a dozen times for sure now. Why do you need to even bother using an agent? If they are as awful as you say, as stupid as you suggest and you stereotype the 'lads' to wear a suit from a store you don't like, then don't use them.
Oh, they are responsible for property prices, that YOU can't afford.
Each year, you need a house to drop the same amount you have been paying in rent to 'break even'. You need it to fall even more for your wait to be 'that' worthwhile.
Anyway, back to the original point, don't bother using estate agents. Simple, especially if you can find a house all by yourself, you big boy, you.
My local Tesco are doing private ads now, get down there tonight, see if there are any private sales on the board.
Eh? A mug in property terms? What the hell is that?
Lets imagine some other types of mug:
A mug in chocolate button terms?
A mug in underpants terms? Actually I am probably one of those. For future reference don't buy your sister-in-law a thong for her birthday then expect your wife to be pleased, particularly if you comment on how nice her arse looks in it.
@Brit1234
I like the response....very good (I asked for that, went through life having to be careful....very good indeed.. although there is a K on the end of the word Prick, hense it never really worked as well as mine did with yours! but possibly much funnier...I did chuckle 8>) )
Burton Suit, I like that too, Burton are very good I hear.....
Lad?, I am very possibly older than you, I certainly hope so otherwise you really are a mug in property terms...I am 36 for your info...that said if I am still classed as a Lad in the sense that was meant...then goodo I feel much younger!
Your age is? out of interest.
And finally prices have a long way to fall, boring Brit very boring. same old thing, you prove my point getting back to the prices falling bit....
You just like to moan about prices.....A shame one day you may need a man in a Burton suit! If you do, warn me....I will make a special trip to the Trafford Centre. anyway...over to you on that one although perhaps we keep this to the topic! The Brat bit was harsh perhaps I take that back.....I am such a ...........ric
Charlie its going to be an interesting few months for estate agents and sellers. If they don't realise prices are falling now they will then. Its time people came a little more realistic.
@Simon
My favourite is the classic "unexpectedly reavailable".
Basically buyer makes insane offer based on ludicrous anticipated selling price of his own place. He then can't sell for what he expects and pulls out or the mortgage company value the new place and tell him to take a hike.
RE Pric.......sorry Ric
My harsh response was to Anna who was calling everyone with different views to EAs stupid.
I too think common sense is a virtue and it is for that reason I would not touch property with a barge pole.
Can't you see the signs, can't you understand the wider funding issues, can't you see that today's prices are completely unsustainable?
I will buy when I choose to, the window won't be so narrow that if I don't rush in now I will lose out. House prices have got a long way to fall yet. Prices are falling in your peak selling period, they will continue falling in the quieter times.
I don't need a Burton suit dressed lad to find a home for me. ;)
Just a thought.....
Perhaps I really am a half wit! (Brit1234 might agree) as I would put it on in some cases and not in others.........
If my opinion prices have dropped but I have no firm proof to show it on a particular property type (ie unique or going off speculation, which on the odd occasion we must!) then I would it on and give it ago!
If there is no yard stick to go off then there is no yard stick to say it is not worth it?
That said when it is your typical development house or just simply more than one example to show £50k on top is barmy...then why waste the money....that said what when the vendor wants to try for £50k more but is understanding they might need to drop....take the business my view as you will not get the second chance!
* Status changed: from 'Sold STC' to 'Available'
* Status changed: from 'Available' to 'Sold STC
The above is coming up a hell of a lot in recent months on my right move/property bee.
Is it down to surveyors valuing the property lower than the accepted offer?
Also does the sold STC marker go on when the seller accepts the offer or later on?
Hi Rant
Just to put a spin on your post!
I always tell my staff not to worry about a sale fall throughs, the more you sell the more fall through, simply statistics....
If they are not selling they can not fall through, all agents hate fall throughs as much as the vendor BUT they are part of the industry CRASH or BOOM, but it is easy to talk about them in the CRASH because its more exciting news for the doom and gloomers out there!
If it sells once it will sell again, you can take comfort in the knowledge the price attracted a buyer!
@Brat1234....sorry Brit1234......... you really do sound like a Brit of a Brat! for all your talk of education you stopped counting at 4 after your name! was five simply too hard to get too or did you run out of fingers? it would make sense you did run out of fingers as the saying "pull you finger out" really applies to you on the whole buying a property subject.........you just moan, moan moan moan......and then insult a few people in the process!
Common sense I personally think is much more of an asset than having a few A levels that your CV shows yet still fails to get you where you want to be in life......you may be the perfect proof, in the fact that rather than getting on with things you just post the same old story on how the market needs to get to where you want it to be and rather than get out there and aspire to get to where the world is you want to wait for it to get to you!, yet when your offered help (I have offered) to get you a property for a price you want, you give a half decent answer on job uncertainty and then waffle about prices being too high
If you dont want to buy a property or CAN NOT AFFORD one, go and play on Facebook and moan there.....or if it is genuinly prices are just a bit too high as your posts always end up saying (inc a few insults to agents) then let me know the price you want to pay, where and what you want and I will make it a mission to find you a deal.....yep an Agent working to help you!
Come on Brit1234 make it happen, or be honest and admit you have no intention to buy ever!
Sorry - in my last post I omitted the 'names' of several Agents who post on here that I sincerely doubt would market the theoretical property that 'Just a thought.....' referred to. That was not intentional - and you all know who you are - it is simply that I am involved in exactly this debate on another thread as you will all be aware, so I used the example.
'Just a thought.....' - you seriously need to look at your business model!
EVERY PROPERTY you fail to sell is an advert for the competition.
Think about it...
Just a thought...: "What stupid person would say no to business in the economic environment we are in at the moment??"
Answer: THIS stupid person would - if he knew that he had NO chance of selling it, and that the vendor would more than likely pull it off the market after I'd pulled my plods off trying to find a buyer stupid enough to buy it at an obviously outrageous price - that's who!
But, then, I'm no longer an Agent, so I guess everyone else WOULD. Except Chris, that is. He's equally as stupid as me, apparently, as he refuses overpriced properties in favour of ones he can sell...! ;o)
Estate Agents act on the vendors instructions right? A vendor asks for an estate agent to value their property and 9/10 the vendor will already have a figure in mind and will ignore the advice the agent gives. Thus if the owner says put it on for 50k more than what the agent valued it at we have to do it....... or say no the the business. What stupid person would say no to business in the economic environment we are in at the moment??
Pee Bee - I think that's a rewording of a good question you asked on an older thread, which unfortunately disappeared off the radar before it could get much response.
As an anecdotal, I visited some friends the other night (some here may be surprised that I have friends!) who rent now but, liking the area, had hoped to purchase the smaller house next door which they like too. They knew the owner was planning to sell it at some point and had mentioned their interest in passing. To their dismay, it went on to the market before they knew and was snapped up by someone else at full price within hours. They were somewhat gutted to say the least.
Since they have to move out of their rental in the coming weeks, they have signed another rent agreement for somewhere else nearby. Meanwhile, the house they had wanted is now back on the market, for what reasons they don't know. However, browsing Rightmove for my area (it's me that keeps pushing their viewing figures up), time and time again I see properties coming back to the market after a few weeks or sometimes longer of being SSTC.
Bob: "Every so often someone walks through the door offering full or near full asking price. Usually they have no offers on their own home yet, or even have not marketed it yet, but they think that they will get the full price of whatever they ask for when they put their house on the market. Or they offer full asking asking price and have not yet even enquired about mortgages.
By offering full asking they just reinforce the denial in the other sellers minds and then the property goes SSTC for several weeks whilst everyone lives in laa laa land."
Sorry - why would a property be considered SSTC for ANY of these purported 'buyers'?
Anna: the people you refer to as "HpC muppets" have just as much right to air their view on here as anyone else, until the site owners make this Members Only. Until then, you will have to roll with the punches and anyone and everyone (me included...) will be able to post their thoughts - whether or not you and others agree with them.
I have said before that this site provides Agents with a window where they can see what is being said out there that they may otherwise not see (some may simply choose not to see...). There are the militant types, but some offer great craic, in fairness. Yes, it's repetitive - but then so is what we reply with!
These people you refer to are potential buyers, aren't they? Then use this as a selling opportunity! The one to sell rantnrave his new family pad gets MY neverending admiration!! (all bets off if the next boom starts tomorrow, needless to say... ;o) )
As an agent, you are first and foremost a people person, are you not? You deal with difficult situations, objections, rejections etc on a daily basis. So maybe today is a stressful one for you - but why add to it by pouring oil on the coals? HPC vs property people is always going to be opposite ends of the rope. They tug: we tug back. Insult them in such a way and you will get the rope straight back at you - trust me...
@Hampshire Agent
'I don't know about that HD, in my patch prices are really starting to soften. There are literally no takers for the average executive detached at circa £250k. This price has been commonplace for the past couple of years but Vendors are now having to market at sub £220k to generate any viewings at all. These sales often complete at sub £200k.'
___________________
In Swansea Mumbles sellers want 300K sold for a 3 bed detached and 365K for a 4 bed. They want their asking prices to be higher.
You tell them virtually nothing is selling over 250K but they just ignore the advice. If we don't market at their asking price they will just go to another firm who will.
Every so often someone walks through the door offering full or near full asking price. Usually they have no offers on their own home yet, or even have not marketed it yet, but they think that they will get the full price of whatever they ask for when they put their house on the market. Or they offer full asking asking price and have not yet even enquired about mortgages.
By offering full asking they just reinforce the denial in the other sellers minds and then the property goes SSTC for several weeks whilst everyone lives in laa laa land.
The banks are sending surveyors out and there is increasing reluctance by surveyors to value anywhere near the asking price now. Sellers get angry when they are told that the bank will not lend the full asking price but we have buyers who get angry also - work that one out.
Some cash buyers are still around but most are just sitting on their cash refusing to be drawn into the market. I can understand that.
Going to be a long Summer.
@Hampshire Agent
'I don't know about that HD, in my patch prices are really starting to soften. There are literally no takers for the average executive detached at circa £250k. This price has been commonplace for the past couple of years but Vendors are now having to market at sub £220k to generate any viewings at all. These sales often complete at sub £200k.'
___________________
In Swansea Mumbles sellers want 300K sold for a 3 bed detached and 365K for a 4 bed. They want their asking prices to be higher.
You tell them virtually nothing is selling over 250K but they just ignore the advice. If we don't market at their asking price they will just go to another firm who will.
Every so often someone walks through the door offering full or near full asking price. Usually they have no offers on their own home yet, or even have not marketed it yet, but they think that they will get the full price of whatever they ask for when they put their house on the market. Or they offer full asking asking price and have not yet even enquired about mortgages.
By offering full asking they just reinforce the denial in the other sellers minds and then the property goes SSTC for several weeks whilst everyone lives in laa laa land.
The banks are sending surveyors out and there is increasing reluctance by surveyors to value anywhere near the asking price now. Sellers get angry when they are told that the bank will not lend the full asking price but we have buyers who get angry also - work that one out.
Some cash buyers are still around but most are just sitting on their cash refusing to be drawn into the market. I can understand that.
Going to be a long Summer.
Brit1234: "That would be hard to do due to most estate agents having few educational qualifications where the most of the non EAs I bet here have degrees, A levels, masters etc." There you go again - gambling seems to be your favourite pastime. Everything is a gamble to you, isn't it. House prices; who's got beter qualifications - you just love wagering you know better.
One day, the dice is gonna roll against you. Dealer always wins in the end...
Play the safe odds, mate - buy a house. Bet you can't show me a single example of a property that has LOST money in 25 years (unless it fell off a cliff, that is...)
RE Anna "Could EAT not introduce a min age so all the silly children (HpC muppets) who blight the site with endless rubbish to show how clever they are to mummy, cant get on? Or make the sum harder???"
That would be hard to do due to most estate agents having few educational qualifications where the most of the non EAs I bet here have degrees, A levels, masters etc.
Making the sum harder would exclude the majority of estate agents from the site. Maths and figures aren't their strong point especially when house selling prices keep falling yet estate agents keep putting asking prices up. lol
How about a few quadratic equations please?
Could EAT not introduce a min age so all the silly children (HpC muppets) who blight the site with endless rubbish to show how clever they are to mummy, cant get on? Or make the sum harder???
HD "Dont worry about what Brit 1234 says, he rambles on about the same old thing in every post, hes just a bit bitter as his crash hasn't come along yet."
News flash - House Price Crash has just come along today, Brit you no longer need to remain bitter. Crash here now.
Land registry, Halifax and Nationwide have been showing price falls for months now, year on year prices are back negative.
So if you are a surveyor or a estate agent better get those valuations right of the banks will sue you. Especially as prices continue to plummet.
A lot of the recent posts on this issue are ill informed, and becoming just plain silly.
RE Mitty "BRIT1234..............Estate Agents Do Not Value we give a market Appraisal. Surveyors Value. Fact"
Appraisal - A professional opinion, usually written, of the market value of a property, such as a home, business, or other asset
www.investorwords.com/237/appraisal.html
Why does homes under the hammer then 6-8 estate agents giving valuations every week day?
Is it fair to say estate agents give the valuation for asking prices and surveyors give the valuation for the banks?
I don't know about that HD, in my patch prices are really starting to soften. There are literally no takers for the average executive detached at circa £250k. This price has been commonplace for the past couple of years but Vendors are now having to market at sub £220k to generate any viewings at all. These sales often complete at sub £200k.
Dont worry about what Brit 1234 says, he rambles on about the same old thing in every post, hes just a bit bitter as his crash hasn't come along yet.
BRIT1234..............Estate Agents Do Not Value we give a market Appraisal. Surveyors Value. Fact
The truth is that we had a decade of madness where all were to blame for overvalued houses.
Builders committed mass land registry fraud using gift deposits, registry prices were far more inflated than actual selling prices. Surveyors then used these artificial prices to value other homes in the area falsely.
Mortgage brokers many based in estate agents got applicants to inflate their salaries in the infamous self cert/liar loan scam with at the peak of the market making 40% in 2007.
Banks for generally irresponsible lending in the mass market share grab. 100%, 125% mortgages, interest only, equity release and also their share of self certs as well.
Bank of England for keeping interest rates too low for too long after the dot com burst.
Buy to let and all their gearing to use so called equity to purchase their portfolios.
Property porn TV programs encouraging people to speculate on property prices.
Gulilable, irresponsible or stupid buyers.
Finally over valuing Estate agents.
Where there is blame There is a claim!
The suits against Surveyors are the least of your worries oh BTL levered ones ... the real fun will start when the first top of the market purchaser now in negative equity sues his lender for mortgage mis-selling. This is the next huge crisis to come for the banks and building societies. I reckon there will be plenty of email traffic in those offices from their economics teams etc (the people with a modicum of intelligence) pointing out the over-valued nature of the market in 2007. Those will form the basis of the suit. If I was in that position - ie now in negeck and cant move and can get legal aid I would definitely have a go. If you think mortgage lending is constrained now just wait until THAT little scandal gets going ...
I know a man who got a £1.3m mortgage against a house realsticaly worth £1.05m at the time (2007). When he inevitably got into financial trouble he was laready n negative equity at the peak of the curve! it was subsequently reposessed and i notice has just gone under offer for aroud £800k
Disbelief: "...and bearing in mind people like Peter Hendry who post on here..."
Meaning??
@bucks the trend
Out of interest, and bearing in mind people like Peter Hendry who post on here, how was anyone meant to know a statement such as " 'Claims pile in against over-valuing by Estate Agents'." was a joke?
No ;) or LOL or anything to suggest it. People aren't clairvoyant.
@Ricky Gervais
You're right, i'm just not funny. Apparently you are....
Ok - so it wasn't really Peter Hendry - it was me - but it was possible the most intelligent thing attributed to him.
Wibble.
you have never been taken seriously because every single thing you type has been nonsence.
Welcome back. PH
@ Bored.com
I gave up, as I was not being taken seriously here - no joke!
Back on topic... Here's a link to a more detailed article of this story. Interesting reading!
http://www.citywire.co.uk/money/house-price-bust-surveyors-feel-the-heat/a494835/2
Buck - Maybe you're just not funny. Nice attempt of humour though - A for effort.
Nobody has to laugh or embrace your comment - it was pretty pointless, boring and unfunny to be completely honest - it should have got worse feedback!
"smaller ones probably cannot afford to do so"
Smaller surveying firms are unlikely to get enough of this type of work anyway to make it worthwhile including it in their PI cover. With the high risk & low fees paid they're daft to take the work on.
Say what? Over-valuing? Surely not?!
At least those surveyors are going to be much more cautious in future.
@All
Oh dear, it seems everyone has lost their sense of humour today. It was a JOKE - a nod to a very current topic, which has been the subject of much debate here in recent times.
Give me strength.....
@Bucks the Trend - No - because if the claims were against the agents then that is what it would say.
The surveyor is contracted by the lender and owes a duly of care to the buyer. The agent is legally bound to use best endeavours to the best for the client - which most vendors will tell you is to the get the best possible price.
I agree with Ray that at that point in time the value is set - not in the future. BUT anyone remember the 1980's and how valuers dealt with their valuations?
@Ray Evans
Word of advice - don't take things so literally!
Where is Peter Hendry?
@Bucks the trend
EA's do not 'value' for lenders.
If the surveyors in question did their jobs properly at the time there should be no problem. The big surveying firms should fight this - smaller ones probably cannot afford to do so. This is a serious one. Get serious.
Shouldn't this read - 'Claims pile in against over-valuing by Estate Agents'.....
"House prices are an opinion - debt is real"
[Just getting my zimmer frame out...]
I remember back in the early 90's a whole load of surveyors getting caught by this kind of thing.
They had valued a property in 1987 or 88, the market had crashed and the property had been repossessed after the owners had lived in it penniless for months.
The properties were trashed and prices were at rock bottom.
The surveyors were blamed for over-valuing or just doing a drive-by or missing structural movement or whatever.
As a surveyor, you can only value for the moment, for that day and what happens in 6 months or 6 years is of no consequence.
But of course, you have your notes and comparables handy to prove your due diligence, so in the end, if you did your job right, it is not a problem.
Do the surveyors get money back from lenders when values rise and a repossed house is sold for greater than the value placed on it?
This appears very punitive and unjust that market conditions lead to litigation but then we are living in an escalating litigious society. Damn the Americans for leading us like lambs to the slaughtrt on this one.
Makes you realise why valuers are down valuing to very low figures. Heard of one testerday that 4 years ago it was valued at £400k and last week at £125k. I think the office junior went round on that one last week.
i agree with you Ray. surveyors put a current value on a property based on sold (completed) prices that are comparable. their liability will, maybe, occur where they haven't done enough research and not got comparables to back their valuation.
I do not understand the validity of this.
A valuation is surely that which is applicable at the time?
Who can foresee the future which is out of the surveyors control?
Am I missing something?