Surveyors face action over 'high' valuations

NATIONALISED mortgage lender Bradford & Bingley is understood to be threatening legal action against surveyors for over-valuing properties at the height of the housing market.

The firm, which specialised in risky buy-to-let and self-certified mortgages, is believed to be one of a number of lenders behind letters being sent to surveyors.

Lenders are targeting surveyors after selling homes that they repossessed for far less than the original valuation.

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But surveyors claim this is forcing up their professional indemnity insurance, as they are obliged to inform insurers of the claim.

B&B's 40bn mortgage book was nationalised in September 2008 when it collapsed, and has suffered far higher arrears rates than the average across Britain.

It wrote more than 60 per cent of its mortgages in the buy-to-let arena.

Most recent figures showed the proportion of its mortgages in possession or more than three months in arrears had risen to 5.88 per cent, from 4.6 per cent for the whole of 2008.

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That compares with an average of 2.4 per cent at the end of September, according to figures from the Council for Mortgage Lenders. Repossessions had shot up by more than 50 per cent to 961.

Allied Surveyors in England and Wales, one of Britain's biggest independent surveying firms, was recently forced out of business as a result of professional negligence claims.

An industry source said: "Lenders are trying to back all of their problems onto the valuers. The negligence came from lending in the first place.

"The more of these letters go out, the more insurance rates go up for valuers."

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A B&B spokesman said: "As part of our ongoing review of our mortgage book and in common with other lenders we, from time to time, discover cases where we feel there is evidence of valuers' negligence and we therefore put the firm on notice to ensure that a valid notification is made to their professional indemnity insurers."

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