TalkingProperty A worrying trend to 'value up' properties is developing, says Eddie Barrett, who also believes that professional valuers should be consulted before loans are made

A recent meeting with some colleagues from Real Estate Alliance pointed to something sinister, which came up in conversation. It transpires that some of our members have been asked to "value up" properties when submitting valuations for mortgage approval.

When we analysed our experiences that day, we all agreed that the problems we were experiencing were not uncommon, but fortunately not at epidemic stages yet.

This stems, not from the current topic of Dublin guide prices or Advised Minimum Values, but from the valuation panels of building societies, banks and insurance companies which require a property to be valued before they will grant a mortgage to an individual or couple.

These valuation reports are an endorsement that, in the valuer's opinion, the property concerned represents the purchase price/value, so as to satisfy the lending agency that the percentage loan offered does not exceed or perceive any possible current negative equity.

Many valuation reports pass through my hands every working day together with those of all other valuers and auctioneers around the country. Recently, my colleagues and I have had experiences where a mortgage broker, or in some cases the proposed purchaser, have contacted us directly with instructions to prepare this valuation document.

What is worrying is that some have gone so far as to suggest that we might "massage upwards" our "opinion of value", so as they may qualify for their maximum mortgage. Put simply, there seems to be an increasing trend to suggest misleading the lending institutions as to the actual value of a property, so that a purchaser can get a larger mortgage.

This raises serious concerns for the whole mortgage market and begs the question as to how many brokers and potential purchasers encourage this practice. While I would hope that this number is very small it is a scary prospect if you think about the potential impact of "valuing up".

The very fact that the broker or the mortgage client calls or gives the instructions to the valuer leaves the gates wide open to this possible suggestion of malpractice in my opinion.

Perhaps it would be more prudent if, first, the lending institutions concerned might first sharpen their pencils by examining the appointments of these potentially difficult brokers.

Everyone as a whole in the property industry has welcomed Minister for Justice Michael McDowell's plans for the new regulatory body for the profession, yet there still seems to be a lack of control proposed in relation to the panelling of valuers in property. The lack of appointment of "expert valuers" to the panels of banks, building societies and insurance companies is hugely questionable.

Extraordinarily, engineers, architects and draughtspersons are regularly invited to sit on these panels and carry out valuations/opinions of value, for a number of lending agencies. These people will tell you straight out that they are not professional valuers and how they can feel even a little confident in valuing a property I do not know.

What I do know is that I would never attempt to carry out a structural report or, for that matter, endeavour to design a house or building. These things are best left to those professionally qualified to carry out the task.

I feel that it is high time that all the building societies examine this whole area, so that only properly qualified, professional, indemnity insurance-covered valuers are responsible for preparing valuations.

I also call on the major high street banks to set about immediately to appoint valuation panels of only professionally qualified and indemnified persons.

When I recently voiced this to a senior person in a bank, he told me they did not want to "upset" their client/customer/estate agents if they were not allowed to carry out work for them by the setting up of valuer panels. These practices are something that needs to be immediately nipped in the bud before it becomes yet another potential can of worms for the property industry.

• Eddie Barrett FIAVI is currently chairman of Real Estate Alliance. He is past president 2000/2001 of the IAVI and is managing director of North's Real Estate Alliance in Tralee, Co Kerry