Are Your Retirement Dreams Being Down Valued?

You’ve worked hard all your life, and your home is likely your biggest asset. So, it’s worrying to hear that some lenders are slashing the value of homes when people are looking to use their equity for retirement.

What’s the Problem?

Brokers, who help people get equity release loans, are seeing a worrying trend: lenders are undervaluing properties, sometimes by thousands of pounds. This is happening even when similar homes in the area are selling for more.

Rita Kohli, a mortgage expert, says she’s seen valuations 20% lower than what estate agents are valuing homes at. She blames the current economic uncertainty for this “doomsday” approach by valuers.

Why are Valuers Being So Pessimistic?

One reason is a fear of urban decline. Valuers are worried that areas with struggling local businesses could become “dormitory suburbs” – places where people just live and commute, not a vibrant community.

But Dan Osman, a later-life lending expert, says some valuers are being overly cautious, even in areas with good infrastructure and potential for growth.

He cites the example of homes near rivers. Even if a house is built well above flood level, some valuers are still assuming it’s likely to flood, and this is lowering the value.

The Rural Dilemma

The problem isn’t just in cities. Holly Hensleigh, a retirement planning expert, says it’s also a common issue in rural areas. Because homes sell less frequently in the countryside, valuers rely heavily on the few recent sales, even if they don’t reflect the true value of the property.

What Can You Do?

  • Get multiple valuations: Don’t just accept one valuation. Get quotes from several lenders to compare.
  • Challenge low valuations: If you think a valuation is too low, ask for a detailed explanation. It’s your money and your home – you have the right to understand the reasoning behind the valuation.
  • Use your local knowledge: Share your knowledge of your local area with the valuer. Let them know about recent improvements, local schools, or any other factors that might increase the value.
  • Find a specialist: There are lenders and brokers who specialize in later-life lending. They understand the unique challenges of this market and can help you get a fair valuation for your home.

Don’t let fear and negativity stop you from accessing your hard-earned equity for a comfortable retirement. Take steps to protect your interests and ensure you get a fair deal.