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| LSL puts aside £17m to cover property valuation disputes | LSL puts aside £17m to cover property valuation disputes |
| (25 days later) | |
| A leading firm of surveyors has put aside another £17.3m to meet claims from lenders who are disputing valuations of properties they lent mortgages on during the property boom. | A leading firm of surveyors has put aside another £17.3m to meet claims from lenders who are disputing valuations of properties they lent mortgages on during the property boom. |
| LSL Property Services, which owns e.surv chartered surveyors as well as estate agencies Your Move and Reeds Rains, said the provision covered claims relating to properties it valued between 2004 and 2008 – a period surrounding the market boom and the subsequent fall in prices which left many people in negative equity. | LSL Property Services, which owns e.surv chartered surveyors as well as estate agencies Your Move and Reeds Rains, said the provision covered claims relating to properties it valued between 2004 and 2008 – a period surrounding the market boom and the subsequent fall in prices which left many people in negative equity. |
| "This was a period of relatively high risk lending characterised by higher house prices, high loan-to-value ratios and considerable levels of buy-to-let and sub-prime lending," LSL said. | "This was a period of relatively high risk lending characterised by higher house prices, high loan-to-value ratios and considerable levels of buy-to-let and sub-prime lending," LSL said. |
| The company outlined the extra £17.3m provision in its results for the first half of 2012, saying the rise in claims it has seen has partly been prompted by anticipated changes to "no win, no fee" rules next year. | The company outlined the extra £17.3m provision in its results for the first half of 2012, saying the rise in claims it has seen has partly been prompted by anticipated changes to "no win, no fee" rules next year. |
| LSL, which has already put aside or paid out £20m over the issue, said high levels of claims have been "industry wide" and it has tightened its own internal controls as the market has changed. It added that many of the lenders making claims were no longer active in the mortgage market. | LSL, which has already put aside or paid out £20m over the issue, said high levels of claims have been "industry wide" and it has tightened its own internal controls as the market has changed. It added that many of the lenders making claims were no longer active in the mortgage market. |
| Steven Gould, director of regulation at the Royal Institution of Chartered Surveyors, said the body had seen some "market distress" among its members due to generalised claims being made as a result of falling house prices. | Steven Gould, director of regulation at the Royal Institution of Chartered Surveyors, said the body had seen some "market distress" among its members due to generalised claims being made as a result of falling house prices. |
| He said that while claims relating to negligence over surveys where something has been missed were relatively easy to prove or disprove, ones relating to valuations are often more complicated to deal with as claims tended to be less specific. The value of the property on the day of the survey is based on comparisons with similar homes, Gould said. | He said that while claims relating to negligence over surveys where something has been missed were relatively easy to prove or disprove, ones relating to valuations are often more complicated to deal with as claims tended to be less specific. The value of the property on the day of the survey is based on comparisons with similar homes, Gould said. |
| Lenders who often use no win, no fee solicitors are increasingly pursuing claims "aggressively" before any changes to the law take place, the LSL report said. | Lenders who often use no win, no fee solicitors are increasingly pursuing claims "aggressively" before any changes to the law take place, the LSL report said. |
| The £17.3m, which equates to £13.1m after tax, will be partly offset by a programme to dispose of some freehold properties currently held in the balance sheet, which is expected to raise around £9m. | The £17.3m, which equates to £13.1m after tax, will be partly offset by a programme to dispose of some freehold properties currently held in the balance sheet, which is expected to raise around £9m. |
| The report did not say which of LSL's brands had been involved in the claims, or how many claims had been made. It said that as well as claims it had previously considered dormant now being pursued, new ones are continuing "at a high level". | The report did not say which of LSL's brands had been involved in the claims, or how many claims had been made. It said that as well as claims it had previously considered dormant now being pursued, new ones are continuing "at a high level". |
| LSL shares fell 13% today. | LSL shares fell 13% today. |
| Top mortgages | Top mortgages |
| Chelsea Building Society | Chelsea Building Society |
| Yorkshire BS | Yorkshire BS |
| Yorkshire BS | |
| Provided by London & Country for the Guardian | Provided by London & Country for the Guardian |