60 per cent of all properties sold in London hit by down valuations
Nearly 400,000 UK property transactions have been down valued in the last year alone, according to research by London property agent Benham and Reeves, shared with City PM this morning.
At 59 per cent, London is home to some of the largest levels of down valued homes of all UK areas and it also ranks third in terms of the sheer volume of transactions impacted.
The firm estimates that 47,769 of the 80,965 homes sold across the capital in the last year have been subject to a down valuation.
The research further showed that, across the UK, an estimated 390,285 homes have been down valued by surveyors working on behalf of mortgage lenders, who believe the price agreed by both buyer and seller was too high.
The South East is the region to have seen the most transactions hit by a down valuation. Of the 137,107 homes sold in the last 12 months, an estimated 60,327 are thought to have been down valued.
The North West has also seen some of the highest levels of value adjustments during the selling process, with 54,043 of the 96,506 homes sold in the last year being down valued.
While half of all transactions in Northern Ireland are down valued, a lower level of homes sold means that a total of 12,346 transactions have been impacted in the last year – the lowest of all UK areas.
The firm analysed property market transactions over the last 12 months to reveal how many homes are being down valued based on a devaluation report by Bankrate.
| Location | Sales vol – last 12 months | Properties down valued % | Est properties down valued – last 12 months |
| South East | 137,107 | 44% | 60,327 |
| North West | 96,506 | 56% | 54,043 |
| London | 80,965 | 59% | 47,769 |
| Yorkshire and the Humber | 72,654 | 58% | 42,139 |
| East of England | 90,408 | 39% | 35,259 |
| West Midlands region | 69,880 | 50% | 34,940 |
| Scotland | 100,671 | 31% | 31,208 |
| South West | 88,741 | 26% | 23,073 |
| Wales | 36,170 | 63% | 22,787 |
| East Midlands | 66,171 | 27% | 17,866 |
| North East | 33,805 | 43% | 14,536 |
| Northern Ireland | 24,691 | 50% | 12,346 |
| England | 736,237 | 44% | 323,944 |
| United Kingdom | 897769 | 43% | 390285 |
| Source | Transactions between May 2020 and April 2021 (latest available) Gov.uk UK House Price Index | % of down valued properties applied to transactions in the last 12 months |
Cost of down valuation
It’s also estimated that the average property across the UK will take a hit of between £5,000 and £10,000 as a result of a down valuation.
A mid-range drop of £7,500 would see the average UK property down valued by -2.8 per cent.
Properties in the North East would see the largest decline at -5%, along with Northern Ireland at -4.9 per cent and -4.3 per cent in Scotland.
In London where house prices are at their highest, this valuation adjustment would result in a drop of just -1.5 per cent.
| Location | AveHP – June 2021 | House price after est down value cost of £7,500 | Est down value cost % |
| North East | £149,521 | £142,021 | -5.0% |
| Northern Ireland | £153,449 | £145,949 | -4.9% |
| Scotland | £173,961 | £166,461 | -4.3% |
| Yorkshire and the Humber | £194,518 | £187,018 | -3.9% |
| Wales | £195,291 | £187,791 | -3.8% |
| North West | £200,222 | £192,722 | -3.7% |
| East Midlands | £226,846 | £219,346 | -3.3% |
| West Midlands region | £231,429 | £223,929 | -3.2% |
| South West | £294,906 | £287,406 | -2.5% |
| East of England | £327,017 | £319,517 | -2.3% |
| South East | £355,948 | £348,448 | -2.1% |
| London | £510,299 | £502,799 | -1.5% |
| England | £284,029 | £276,529 | -2.6% |
| United Kingdom | £265,668 | £258,168 | -2.8% |
| Source | Gov.uk UK House Price Index (June latest available) | Down value cost applied to average house price |
“Down valuations can be a real thorn in the side of those eager to progress with a property transaction but unfortunately they are a prevalent occurrence within the UK property market,” commented Marc von Grundherr, director of Benham and Reeves.
“They often occur due to over expectant sellers setting their asking price too high but we’re also seeing more lenders request a greater degree of caution by valuers in a market where prices are climbing at a rate of knots,” he added.