New home sellers ‘fantasy number’ warning with problem worse in one UK area | Personal Finance | Finance

Property market insiders have warned that overvaluations — where estate agents inflate asking prices to secure business — are becoming increasingly prevalent. Experts say that subdued consumer confidence and elevated mortgage rates, driven by the conflict in the Middle East, have contributed to a sluggish property market with dwindling transactions, creating fertile ground for overvaluations as estate agents battle it out for a shrinking pool of sales.

“Overvaluations are undermining the UK property market and they’re on the rise,” said Shaun Sturgess, director of Swansea-based Sturgess Mortgage Solutions, a broker.

He continued: “They’re one of the most damaging and underreported problems in the UK property market. As a mortgage broker, the fallout lands on my desk daily.

“Every overvalued instruction sets a transaction up to fail. A buyer invests emotionally and financially, solicitors are instructed, surveys commissioned, then the lender’s independent valuation arrives and tells the truth the agent wouldn’t.

“On the back of that, deals collapse and real people bear real costs. For some agents this isn’t carelessness, it’s strategy. Win the instruction with a flattering number, lock in the sole agency agreement and manage expectations later.

“What compounds this further is agents pressuring buyers to pay for searches before a mortgage offer even exists. When a qualified valuer subsequently down-values the property and the deal collapses, those costs are simply lost. No refund. No accountability.”

Expensive compliment

Evren Ergin, founder of property valuation platform ValuQ, described overvaluations “as the most expensive compliment a homeowner will ever receive”.

He went on to say: “The flattering figure wins the instruction, then costs the seller months of silence and a string of price cuts. Having spent years in the estate agency sector, the problem is not bad agents but a broken incentive: the industry rewards winning the listing, so an honest agent who values a home accurately can lose it to a bigger number. That punishes good agents as much as it punishes sellers.

“The fix is comparison, not blame. It’s important to put valuations from competing local agents side by side, each backed by sold-price evidence, and the honest number then becomes the winning number.”

Martin Rayner, financial adviser at Compton Financial Services, said it came as little surprise that overvaluations were on the rise “as they become more common when the market slows”.

He went on: “Estate agents are competing for fewer instructions and sellers naturally gravitate towards the highest figure. There is a long-standing industry perception that some agents win business with optimistic valuations before expectations are brought back down to reality.

“I recently spoke to a client selling a property worth around £1.6m-£1.7m. One agent suggested £2m based on a supposedly similar sale. When checked, the property was not genuinely comparable.

“He wisely obtained three valuations before deciding on a realistic price. Overvaluations waste everyone’s time. Sellers miss opportunities, buyers become sceptical and transactions can fall apart when surveyors arrive at a very different figure.”

Nouran Moustafa, practice principal and IFA at Roxton Wealth, said “overvaluations are one of the reasons the property market feels so messy”.

She went on to say: “A seller is given a fantasy number, starts mentally spending it and then the mortgage valuation brings everyone back to earth. I do think it is becoming more visible in 2026 because the market is more price-sensitive.

“Buyers are stretched, lenders are cautious and surveyors need evidence. You cannot just price a house based on vibes and hope affordability catches up. The damage is real. Overvaluations waste weeks, collapse chains, create down-valuations and force renegotiations after everyone has already paid for searches, surveys and legal work.

“People fall for them because the highest valuation feels like the best agent. It is not. Sometimes it is just the best sales pitch. The fix is boring but powerful: use sold comparables, not dreams. Sellers need evidence, buyers need discipline, and agents need to stop treating overpricing as a way to win instructions.”

Thomas Boughton, founder of London-based Artillium Real Estate Finance, warned that overvaluations were widespread across the capital: “Sellers are often given unrealistic expectations about what their property is worth, while buyers can face frustrating down-valuations at the mortgage stage.

“Some agents continue to overvalue properties to win instructions, only for sellers to be encouraged into a series of price reductions when interest fails to materialise. Sellers should consider obtaining an independent valuation before bringing their property to market. An objective assessment can help set realistic expectations and avoid disappointment later in the process.

“When homeowners make onward purchase decisions based on inflated valuations, it can create pressure throughout the chain. Down-valuations can lead to renegotiations, delays and even collapsed transactions.

“The market ultimately determines a property’s value. Accuracy from the outset attracts genuine buyers, creates momentum and gives all parties the best chance.”

Simon Bridgland, broker at Canterbury-based Charwin Private Clients, argued that introducing regulation and proper qualifications could offer a solution: “Estate agents don’t need to be as qualified as a surveyor, but they could be a market-driven surveyor.”