Purpose – The aim of the present paper is to consider the effect of the current approach to valuations for mortgage on the level of house prices during the housing bubble of 2000-2008 which has been a major contributor to the following recession followed previous smaller bubbles in 1972 and 1990. Despite a warning from the International Monetary Fund in 2004 that prices were too high and home buyers should “exercise particular caution”, no fundamental research appears to have been done into the contribution to this of those responsible for valuation for mortgage. Design/methodology/approach – Data from the Nationwide Quarterly Index were used as a basis and compared with the writer’s professional experience in carrying out valuations for mortgage. Findings – Instructions to valuers advising on the properties offered as security for a mortgage loan have requested only a valuation based on the market as it existed at the time of the valuation without regard to the possibility that a change in economic circumstances could cause a fall in the value of the security. Many mortgagors have found on sale or repossession that their liability to repay their mortgage is greater than the value of the property. Originality/value – Valuations for mortgage should include an indication of the possible risks involved, including the results of changes in the global economic environment.
International Journal of Housing Markets and Analysis – Emerald Publishing
Published: Mar 2, 2015
It’s your single place to instantly
discover and read the research
that matters to you.
Enjoy affordable access to
over 18 million articles from more than
15,000 peer-reviewed journals.
All for just $49/month
Query the DeepDyve database, plus search all of PubMed and Google Scholar seamlessly
Save any article or search result from DeepDyve, PubMed, and Google Scholar... all in one place.
Get unlimited, online access to over 18 million full-text articles from more than 15,000 scientific journals.
Read from thousands of the leading scholarly journals from SpringerNature, Wiley-Blackwell, Oxford University Press and more.
All the latest content is available, no embargo periods.
“Hi guys, I cannot tell you how much I love this resource. Incredible. I really believe you've hit the nail on the head with this site in regards to solving the research-purchase issue.”Daniel C.
“Whoa! It’s like Spotify but for academic articles.”@Phil_Robichaud
“I must say, @deepdyve is a fabulous solution to the independent researcher's problem of #access to #information.”@deepthiw
“My last article couldn't be possible without the platform @deepdyve that makes journal papers cheaper.”@JoseServera