Lenders called to play fair on new home valuations

Smartnewhomes.com, the UK’s leading new homes website, is calling for mortgage lenders to be objective in their assessment of new build properties, following recent reports that bulk developer discounts are unfairly impacting on valuations across the board and working to suppress new home prices.

A number of new apartment schemes have been hit hard by oversupply, resulting in extreme caution from lenders. However, developers argue that the same criteria is being applied to low density family homes, that are in short supply and have held their value far better in the current market.

David Bexon, Managing Director of SmartNewHomes.com, comments:

“With fewer sales to offer valuers price comparables, it is easy to see how major bulk discounts are being factored into new-build valuations. However, this is not a fair representation of the market.

“Apartments in high density developments that are being offered at discounts of around 30-40% off asking for bulk purchases, cannot be generalised to the market at large, and do not indicate a benchmark for lenders on how far overall prices are expected to fall.

“New home supply is already running low in many sections of the market, and there is little room for prices to fall any further. As a result, the premium buyers are willing to pay for new homes is still very relevant and valuations must reflect this.”

For more information visit smartnewhomes.com.