Are Property Valuers The Bad Guys?

The Times tends to get criticised for their editorial slant on the housing crash, and this article from yesterday might see the trend continue.

Judith Heywood tells us how one in ten house sales fall through because buyers can’t get credit. This isn’t always down to the banks she says; it’s down to the valuers who work with banks to give them an idea of the resale value of a property, should they ever have to repossess it. Valuers work on the same data as the rest of us, but they run the risk of being held liable if they over-value a property, causing the bank to make a loss further down the line.

Now, we’d like to point out that since valuers are working from Land Registry data, the house price crash is bound to have affected their figures. Is it really ethical for a valuer to go in high just so that a bank will approve credit? Wouldn’t we like to think that valuers were protecting buyers and not just banks?

We can also think of cases however where low valuations have a negative effect. Say you’re a homeowner and want to remortgage your house or rent it out (for whatever reason). If the valuer says your home is worth less than a year ago, the deal you need from the bank might fall through leaving you with few options.

We’re all caught up in the property chain and the difficult times ahead, but the finger of blame doesn’t rest with the valuer. They’re trying to make an informed decision based on the house price data available. Saying they need to give good valuations (as The Times appears to suggest) might kick-start the market in the short term, but is renewed inflation a good long term strategy? That bubble has already burst once.