Its indefensible for estate agents to suggest that all the mortgage surveyor’s valuations are wrong, in a falling market.
The disagreement arises from estate agents having a different market view from surveyors. I was a mortgage surveyor, valuing houses during the 70’s, 80’s, and 90’s, so have had first-hand experience.
Estate agents like to get the ‘best’ price possible by tempting potential buyers.
Surveyors are instructed to do a market valuation based on current sales ‘evidence’, ignoring the pressure that agents are under to inflate prices.
In a falling market, prudence should prefer the surveyor’s figures.
In a rising market, the agent’s notions might have slightly greater merit.
Currently its a falling market, so the estate agents need to get real right now.
Sadly, they’re just not doing that.
I agree.
Estate agents are likely to lead us back to a ‘boom and crash’ scenario unless they fundamentally re-assess the way they conduct their business.
The Royal Institution of Chartered Surveyors (Rics) points out that prices have been squeezed higher by a small pick-up in demand from buyers, combined with a lack of supply of homes to buy.
“There is a reluctance on the part of many vendors to put their properties on the market,” says Simon Rubinsohn, chief economist at Rics.
“We are not wholly surprised. Our own survey has shown new instructions have fallen month on month, and the rise in new buyer enquiries we saw, gave a good steer about the improvement in demand early this year.”
“We think prices will continue to edge up and at the end of the year may be higher than 12 months before, but in 2010, our best guess is prices will not go up further or may even slip back,” Mr Rubinsohn adds.”
Many economic commentators would seem to agree with this view, including Ed Stansfield from the economic consultancy Capital Economics and Jonathan Davis, of Armstrong Davis. Such people are, in effect, saying that the prospect of increasing house prices, in the current economy, is fiction and any such dream, will end in tears.
The recession is still in full spate and unemployment is going to continue rising for some time.
For more info see:
http://news.bbc.co.uk/1/hi/business/8181945.stm
http://news.bbc.co.uk/1/hi/talking_point/8191283.stm