However, the effort has paid off for 30 per cent of brokers who said they managed to get a valuation overturned, in response to the latest Mortgage Solutions poll.
Despite the significant number of respondents saying they had seen a challenge go in their favour, according to the brokers we spoke to it seemed many of these successes were one offs or few and far between.
This was emphasised by Paul Flavin, managing director at Mortgages.Online, who said: “We have only ever had one successful overruling on a valuation but, to be honest, we now don’t challenge as many as we could.”
It was the same for Jonathan Clark, partner at Chadney Bulgin, who said just a tenth of applications which had been challenged by the client worked, usually by the client claiming to have the largest plot or most attractive property.
Akhil Mair, managing director at Our Mortgage Broker said he was “surprised” at how high the percentage of successful appeals were as he had had no luck himself.
He suggested that for those who did not challenge reports, it was either because the borrowing levels were not affected, or the broker ended up agreeing with the valuer after doing their own research.
For others, the results were varied as Colin Chapman, director of Genesis Financial Services said whenever he had tried to object to a decision, the outcomes were a mixture of positive and negative.
Standing by decisions
The brokers also implied surveyors were headstrong and rarely budged in their judgement. “Even by sharing relevant and local comparisons the valuer has always stood by his comments,” Mair said.
Chapman echoed this and said surveyors did not take kindly to having their judgement questioned by the “mere mortgage broker”.
However, this is not a mindset unique to surveyors, as Clark added: “Nobody likes having their considered, professional opinion challenged and surveyors are no different.”
The reluctance to change a decision seems to be individualistic rather than firm-based for some as recalling his “valuation nightmare”, Flavin saw a property which was valued at zero be overturned by senior surveyor from the same bank.
The original surveyor came to the decision due to the smell of unburned aviation fuel in the area – despite initially insisting the lender had no issue with properties near to airports.
Not worth the hassle
Some brokers admitted they picked their battles wisely, generally not opposing a valuation if it did not seem worth it. Chapman said: “To get something overturned is often akin to reinventing the wheel.
“The process is often lengthy and drawn out due to lender requirements and not being able to speak directly to the surveyor about how they arrived at their figure and the supporting evidence for the initial figure and the challenge figure.”
But he said if extensions or improvements had been recently made to a property, these should be argued as it was likely to result in an “uplift” of the value.
Mike Owen, director of compliance and marketing at Diverse Advisers, said despite the majority of his firm’s transactions that fell through being due to under valuations, most of his advisers simply went to another lender.
Surveyors protecting themselves
Flavin suggested it was part and parcel of the industry however, and noted it was generally accepted that sometimes corners would be cut, resulting in unfavourable valuations.
“If something is offered free then someone, somewhere is being squeezed for the cost, in the case of remortgages that’s the valuers and conveyancers,” he said.
Furthermore, pricing a property too optimistically could result in a claim from the lender, Flavin added, and the potential loss of the surveyor’s license.
He said the same also applied to purchases as the valuer tends to be cautious because they are acting on the behalf of the lender.
Flavin added: “It’s not enough that the buyer is willing to pay the quoted price. If that’s not what the valuer can verify through previous sales and be confident in current market conditions, then the purchase price means very little.”
He said because of these factors, under valuations of a few thousand pounds were “futile” to argue with if it resulted in repercussions for him should the property be repossessed.
Challenges to come
With desktop valuations taking precedence due to social distancing measures, some brokers suggested this could lead to an increase in valuation challenges.
Chapman said it would be a “contentious issue” in coming months, while Chadney Bulgin’s Clark said lenders should prepare for more disputes as recent renovations which could increase value are not always considered with remote valuations.