New mortgage catch rocks homebuyers: Families losing out on deals as surveyors undervalue houses

Homeowners are having tens of thousands of pounds wiped off their property price because they are failing to contest low valuations.

These low estimates are causing further misery to homeowners who have already seen a third wiped off their house prices.

As a result, mortgage brokers are urging homeowners wanting to remortgage not to accept a valuation if they think it's too low - or risk missing out on the best home loan deals.

A low valuation can be devastating for any homeowner searching for a good remortgage deal. It means the homebuyer's equity in their home is cut - with the result that many of the best remortgage offers are closed to them. As a result, families are being forced on to more expensive mortgage deals costing them hundreds of pounds extra each month.

The phenomenon has been created by banks and building societies using average mortgage valuations for your area or regional house price indices rather than proper, individual surveys.

But they fail to take in to account very localised house price bubbles - where despite the property slump homes are clinging on to their value. Many homeowners have added value to their houses by doing them up.

Now mortgage brokers are reporting a sudden increase in the number of homeowners choose to contest the value the mortgage lender has placed on their home.

David Hollingworth from London & Country says: 'While homeowners do have to accept that there has been a considerable fall in house prices, they should contest a valuation if it comes in much lower than they think their home is worth. You have to base your own estimate on facts, and not just sentiment towards your home