A SCOTTISH property developer has accused the country's surveyors of deliberately lowering the value of homes to protect themselves from possible legal action from buyers.
Andy Burrell, managing director of the Burrell Company, has caused outrage in the industry after claiming surveyors are afraid that buyers will sue if the value of newly bought properties fall.
Burrell believes surveyors are following a 'herd' ins
tinct on valuations. His company is behind innovative projects such as Bell's Mill in Edinburgh and the Vienna Apartments in Glasgow, and he insists the Scottish housing market is not in crisis.
"The surveyors are covering their backsides and by doing that they're in danger of killing the market by stopping properties being sold," he said.
"It is theoretically possible we'll end up talking ourselves into another 90s-style slump, but a slump that will have nothing to do with real economic fundamentals."
He said surveyors are hiding behind professional indemnity insurance, fearing possible litigation if the value they assign to a property then falls.
"In my opinion it's self-interest – making sure they don't get caught out. Down-valuing has always gone on to an extent, but it seems to be picking up because of the current market nervousness."
He said the primary concern of surveyors at the moment is "self-preservation".
Burrell, who founded what is regarded as the first architect-developer company in Scotland in the early 80s, said: "Most developers and housebuilders in Scotland are still seeing demand in many areas and for many types of properties, yet values are being lowered. That goes against the law of supply and demand.
"A property that was being talked about at, say, £200,000 a couple of months ago is now being valued at £180,000. Why? What's changed?"
Burrell believes that forcing values down coupled with the gloomy coverage of the property market could knock the market further.
Graeme Hartley, director of the Royal Institution of Chartered Surveyors in Scotland, said: "Suggestions that chartered surveyors are undervaluing property and hiding behind their professional indemnity insurance is totally off the mark.
"Chartered surveyors who are RICS members have no benefit in under-valuing. They are not deemed negligent if a property decreases in value so long as they value a property in accordance to the RICS valuation standards and use information on current market conditions.
"Chartered surveyors reflect the market – they don't set the market. Developers may price their properties by working out the cost and adding on a profit, so this will not necessarily match the valuation from a chartered surveyor who has looked at current market conditions."
The full article contains 443 words and appears in Scotland On Sunday newspaper.
