Remortgagers `hit by effect of repossessions`

9 December 2008

Homeowners trying to get a good deal when they remortgage their property, as well as those looking to sell, are being adversely affected by the impact of repossessions.

According to Paul Staley, managing director of LMS, such people could be facing valuations that are 30 per cent lower than they were in autumn last year, potentially putting their personal finances in jeopardy.

Speaking to the Independent, the expert said that the gap between homeowners` price expectations and valuations is widening due to the rising number of forced sales and repossessions, which are pushing down estimates of what homes are worth.

He stated that in order to achieve a price estimate, valuers must take into account a number of factors, including how much three comparable houses recently sold for.

Mr Staley added: "As there is virtually no activity on the open market, forced sales and repossessed homes being sold at auction are being thrown into this basket of averages."

Last month, Nationwide released figures which suggested that the average price of homes in the UK fell by 0.4 per cent in November stand at £158,442.

Tags: remortgage, reposession

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