Concerns over house sale delays
Friday 16th August 2013, 12:31PM BST.
House sales are taking almost one month longer to push through because mortgage valuers have been unable to keep up with a pick-up in activity.
Mark Hayward, managing director of the National Association of Estate Agents, raised concerns that some sale chains are grinding to a halt amid a lack of experts available to carry out valuation work on homes.
Mortgage valuations are compulsory because they confirm to the mortgage lender that a house is worth the price that has been agreed.
Mr Hayward said lenders’ borrowing criteria has shown little sign of weakening and lenders are still “digging back” thoroughly into borrowers’ credit backgrounds.
He added that transactions are now taking around 12 to 15 weeks to go through from start to finish, rather than the more usual period of eight to 12 weeks.
Mr Hayward warned: “The longer the gap, the more risks you incur of the chain breaking down.”
Countrywide, one of the country’s biggest providers of residential valuations and surveys, said some resources have recently come under added strain.
Paul Chapman, managing director of Countrywide Surveying Services, said: “The recent upturn in the housing market has led to an increase in property surveys required by lenders and potential buyers.
“This has placed some pressure on surveyor resources but in many areas of the UK, a property survey can and is being completed within a couple of days.”
Mr Chapman said many Countrywide surveyors are working evenings and weekends and the firm is also ramping up its recruitment efforts.
He continued: “We have been busy taking steps to address the issue of surveyor resources, increasing our recruitment largely through successful trainee and graduate programmes, which will see us more than double our intake in 2013 and again in 2014.”
Government schemes such as Funding for Lending and Help to Buy have widened mortgage availability and have been credited with helping much of the recent surge in activity.
Much of the tentative recovery also hinges on consumer confidence, which has been flooding back into the market in recent months .
The Royal Institution of Chartered Surveyors (Rics) reported on Monday that house prices are rising at their fastest pace since 2006.
Mr Hayward said that the housing market is “all about sentiment”, which he hoped would not be impacted as buyers and sellers face a prolonged wait for transactions to go through.
A further problem is that home buyers’ choice is generally being limited by a lack of homes on the market.
Rics believes the problem has partly been triggered by large numbers of “unsubstantiated” negligence claims which have been brought by banks, which have pushed up valuers’ professional indemnity costs.
It estimates that there are around 8,500 residential valuers in the UK, which it believes should be enough to cope with demand.
The problem for valuers is that doing the job is not always worthwhile financially, Rics has said.
Rics president Alan Collett said recently: “We are wholeheartedly committed to helping the industry find a solution to this problem and are in ongoing talks with all concerned.”
The Council of Mortgage Lenders (CML) said recent figures it released showing that lending to first-time buyers has reached its strongest levels since 2007 show that lenders are “very much open for business”.
A CML spokesman said: ” Lenders have a legal obligation to ensure that they lend responsibly and that borrowers can afford repayments.”