Surveyors are marking down London properties at pace, leaving brokers battling gaps between sale prices and lender valuations
A growing wave of down valuations is cutting through the London and south-east housing markets, with surveyors taking an increasingly defensive approach that brokers say is jeopardising purchases, unsettling chains and exposing how fragile confidence has become ahead of the Budget.
Deals that only months ago would have sailed through are now being tripped up by lender valuations coming in several percentage points below agreed prices, sometimes enough to make the numbers unworkable for even well-funded buyers. The pattern is not uniform, but it is acute enough that some brokers say caution has become the defining feature of the current market.
Flats under strain
The most exposed sector is London flats, where the volume of comparable evidence has thinned and where estate-agent pricing earlier in the year appears increasingly out of step with current demand.
Louis Mason of OPortfolio says the trend is no longer a handful of isolated cases but a shift in surveying behaviour. He explained that his firm is “definitely seeing an uptick in surveyor down-valuations, which is really frustrating for both us as advisers and of course our clients,” adding that “being a London based mortgage broker, we are seeing this particularly with flats in larger blocks and properties where recent comparable sales are few and far between or look potentially inflated by agents.”
The contrast with family homes is stark. Mason notes that “family homes in strong school-catchment areas like Wandsworth and other areas in SW London are generally holding up better,” yet anything listed with spring or early-summer optimism is at risk. The practical advice he is giving has hardened accordingly. Buyers, he says, need to “be prepared for a valuation mismatch and to think ahead about how they’d bridge any gap,” while sellers must accept that “realistic pricing and strong evidence of comparable sales have become more important than ever.”
Oversupply issues
Another part of the story is the large cohort of landlords offloading investment flats, creating pockets of oversupply at precisely the wrong moment.
At Trinity Financial, Anthony Emmerson sees a direct line between these landlord exits and surveyor caution. “We are seeing down valuations particularly on London flats,” he said, explaining that this stems from “the influx of landlords putting their flats up for sale which is causing an oversupply of this particular property type which coupled with lack of confidence in the wider economy is having a negative effect on prices.”
Unlike the flat market, houses are holding their own. “Houses seem to be affected far less, if at all,” he said, pointing to the scarcity of family homes and competition among buyers. Yet the scale of the adjustments is uneven across the capital: “The scale of the down valuation is very specific to the area in which the property is in as some areas have been affected to a larger extent than others.”
Despite the disruption, he expects the imbalance to correct itself over time, noting that “Given that we have an overall housing shortage and the government seems incapable of getting the county building, I do think that this is a temporary dip and will sort itself out over the medium term but is having an adverse effect on those trying to level up.”
Prime market softening
Perhaps the clearest sign of shifting surveyor sentiment is that even prime and super-prime assets, traditionally more insulated from mainstream fluctuations, are now being reassessed.
Guy Nyirenda at Altura Mortgage Finance said his firm has “noticed some recent challenges with valuations of residential property coming back lower than expected over the past 6 months,” including within central London’s higher-value sector.
He described cases where properties long regarded as stable in value have faced reductions, saying “We have seen some valuations, particularly in Central London and especially on high value properties, come in lower than they have been in some years.” One such property, he said, had an updated valuation “just 6 months ago” that has now “be reduced by a further 5% on value over that time.”
Surveyors, Nyirenda explained, attribute these revisions to a fall in active buyers as many await political and fiscal clarity. “Surveyors are quoting that there are fewer active buyers, mainly driven by uncertainty with the prevailing budge,” he said. His advice varies depending on the client’s time horizon: long-term buyers should expect current volatility to settle, while investors seeking rapid returns should take care, “I am also advising investors to be cautious of taking on any investments that are reliant on the short-term market to make a profit.”
Cautious winter ahead
Taken together, the surge in down valuations shows a market caught between sentiment and supply. Surveyors, whose job is to insulate lenders from risk, are now expressing that caution far more assertively than earlier in the year. For buyers, that means being forced into renegotiations, increasing deposits or walking away entirely. For sellers, it means confronting a reality that asking prices alone can no longer dictate value.
Until there is clarity on fiscal policy, and a clearer sense of where demand sits, brokers expect surveyors to continue applying the brakes. What remains uncertain is whether the market will bend to this more conservative tone or whether buyers and sellers will start pushing back as the year turns.
