From The BBC:
Property sales and remortgage deals are collapsing because some mortgage lenders and surveyors are deliberately undervaluing homes, estate agents say.Properties are typically being undervalued by at least 10%, said the National Association of Estate Agents. It said surveyors afraid of being sued by lenders were being overcautious. But the Royal Institution of Chartered Surveyors denied the claim, saying the housing market was constantly changing and had lots of “imperfections”. Mortgage lenders, such as banks, routinely commission surveys to ensure the price agreed for a sale reflects the property’s current value. ‘Insurance fear’If the valuation placed on the property by the lender is lower than the agreed price, the lender may choose to offer a smaller mortgage, leaving the buyer without enough money to cover the asking price and causing the deal to collapse. Lenders may also check the value of a property when it is being remortgaged to ensure they are not lending more than it is wor…
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