Home buyers scramble for extra cash as banks cut mortgage offers

Martin Stewart of London Money, another broker, said: “I think we will start seeing more downvaluations because there is a thing called gravity. We have crossed the Rubicon between sellers’ expectations and the realistic valuations of the lender.”

Most downvaluations have occurred outside London in the areas that recorded the steepest house price growth during the pandemic, said Mr Sykes. He noted the purchase of a house in Somerset that was agreed at £861,000 but was downvalued to £800,000, a drop of 7pc. A house in Surrey was downvalued from £500,000 to £470,000 and a home in Kent by more than 10pc from £380,000 to £340,000, he added.

An acute shortage of homes for sale has made desperate buyers push their budgets to extremes just to secure somewhere to live.

One 32-year-old reader and his fiancée made an offer of £880,000 for a five-bedroom house in south-east London in February. “It didn’t even go to market, we saw it on a day of pre-viewings,” he said. Their offer was accepted, but then their lender downvalued the property by £30,000. “Our broker said it was the third downvaluation she had seen that morning.”

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