A property body has written to the Financial Services Authority to demand an investigation into the advice lenders give borrowers.
The Residential Property Surveyors Association is angry that lenders do not make it clear that valuation reports are not proper surveys. It is also critical of estate agents.
The RPSA, which has around 200 members who qualified as Home Inspectors, said: “Only one in five home buyers obtain a survey or condition report on the property they are buying, yet 80% of home buyers believe that they get a survey.
“The main reason for the discrepancy is that most mortgage borrowers believe that their lenders’ valuation is a survey – which it is not.
“Lenders do little, if anything, to disabuse their customers of this notion, perhaps because they make so much money out of valuation fees – as much as £100m per annum.”
The RPSA’s statement goes on: “Lawyers tend to bury a clause recommending a survey in their terms and conditions or letter of engagement which most clients do not read.
“This is no surprise as so much of their conveyancing business is introduced by estate agents whose primary interest is in securing the sale.”
RPSA council member Alan Milstein said: “It is time for lenders to take responsibility for providing their clients with proper advice.
“They should make it explicit to their borrowers that the valuation they procure is for their purpose alone and says nothing about the condition of the property. They should advise home buyers to get a survey or condition report and take a written signed instruction to this effect.
“If the only way that lenders will take responsibility is by way of dictate by the FSA, then that is what must happen.
“That is why we as a Council have written to Hector Sants to take urgent action to investigate this issue.”
Comments
Mr Hendry/Realising Realty/PropertyMatch/Disbelief/whatever...:
Allow me to furnish you with various definitions of the word "valuation", as taken from 'informed' sources...
* An estimation of something's worth, esp. one carried out by a professional appraiser
* The act or process of assessing value or price; an appraisal.
* The act or process of valuing; specifically : appraisal of property
* The act or process of valuing; specifically : appraisal of property
* The act of determining the value or price of anything; evaluation; appraisal
Now - to your "genuine valuations" you so pompously refer to. Would those be the "genuine valuations" that one of your esteemed RICS valuers (you know - the crowd YOU used to hang out with until they didn't want to play with your ball...) placed upon properties - of up to NINETEEN TIMES their 'true' worth in the recent court case reported on this very website?
So, Realising Reality - your point being...?
@PbroAgent
I have total perspective on this, I'm afraid to have to say.
From what you say, all we need to do is do something about 'the majority' of houses that do not sell currently.
I say increase the knowledge of all the 'other' agents you refer to, so they they too talk sense to all their clients and bingo! Problem solved.
RR, You really have no idea do you? If greedy vendors stopped chosing their agents based upon the ones who offered the highest price and the cheapest fees, then those agents who genuinely offer USPs would be able to lead the way.
If i got a fee every time a vendor listened to my advice which is bourne from many years of experience...oh no I do, because those are the houses that sell!
It is high time that estate agents stopped touting that their free market appraisals are 'valuations'. They are not, and never have been.
Absolute clarity is required here, if necessary by bringing in legislation to stop what is undeniably a gross deception.
Perhaps sellers would really like proper valuations by estate agents if they were offered these? Now there's an opportunity worthy of contemplation. How about agents offering genuine valuations instead?
The first agent to do that would sweep the board.
is this not just a case of them wanting their piece of the pie?