House sales are stalling across the country as a surge of down-valuations pours cold water on the re-hot property market. For almost two years, house prices have been storming upwards, with the average home now worth £286,079 – up 10.8 pc in the past 12 months alone, according to Halifax.
High demand amongst buyers seeking more space, coupled with a shortage of supply, has sparked bidding wars, pushing offers far above asking prices.
But brokers say they are now seeing lenders apply the brakes and increasingly down-value homes by tens of thousands of pounds. This means banks and building societies do not believe a property is worth the price agreed so reduce the amount they are willing to lend. If buyers cannot secure the mortgage they want, they will need to negotiate a cheaper price with the seller or stump up the extra cash to bridge the gap. If nether is possible, and another lender will not offer a larger mortgage, it can cause entire chains to collapse……
Carol Peett, managing director of buying agency West Wales Property Finders and who has worked in the area for 18 years, says buyers should secure hefty deposits before bidding for houses in popular coastal towns because it is difficult to negotiate down prices.
She says “It is not unusual for £600,000 offers to be down-valued by £50,000 as bidding wars lead to excess offers and competition is so fierce for some properties that vendors know they will be able to find another buyer willing to pay the price.”
“One of our clients who was buying a property with a magnificent sea view had it down valued by £45,000. Fortunately I had warned him that this was likely to be the case and they had a large enough cash deposit to cover the difference”.
“This is a major hiccup for a lot of people buying properties in Wales and it is causing chains to collapse”……
If you are looking to buy a property in Pembrokeshire, Carmarthenshire or Ceredigion, contact West Wales Property Finders on 01834 862816. We can find your dream property for you whilst saving you time, stress and sometimes money too.