Source: http://www.independent.co.uk Homeowners looking to remortgage could be facing valuations 30 per cent lower than their homes were worth in autumn 2007, when the market was at its peak - even though average prices have only fallen by around 15 per cent during this time. This harsh reality was revealed last week by Energy Reports and Surveys (ERS), the valuation arm of conveyancing giant LMS.  The widening gulf between homeowners' price expectations and the reality is down to growing numbers of forced sales or repossessions, which are pushing down estimates of what all homes are worth. ERS managing director Paul Staley says "To achieve a valuation for mortgage purposes, a valuer is required to take several factors into account: the area; the size and type of the home; and the guide sale price they have been given or the last valuation. But valuers will also need to find three comparable properties and what they recently sold for. And as there is virtually no activity on the open market, forced sales and repossessed homes being sold at auction are being thrown into this basket of averages,". One look at the most recent property market figures and it's easy to understand how "standard" valuations can be so skewed. Estate agents sold an average of 10.9 homes in the three months to October, according to the latest housing report from the Royal Institution of Chartered Surveyors, which equates to little more than a dismal three a month. But the Council of Mortgage Lenders says repossessions are set to rise by 50 per cent this year. Ballooning repossession figures are becoming an issue for other sets of property statistics too. The Government's Land Registry figures, which are based on completed sales of homes, have been criticised as they exclude repossession sales at auction on the grounds that they do not reflect the "full market value" of the property.  Other house price indices, such as those from Nationwide and the Halifax, are based on approvals of mortgage valuations. These will factor in homes repossessed or sold quickly at auctions, as the valuation requires this "basket" of comparables. As a result, the Land Registry figures published on 28 November showed a 10.1 per cent annual fall in prices across England and Wales - considerably healthier than the indices from Halifax and Nationwide, which revealed prices dropping by 15 and 13.9 per cent respectively.  Ray Boulger, senior technical manager at broker John Charcol, says as well as finding new deals, managing valuation expectations on behalf of clients is becoming a more important role for mortgage brokers."Clients often come in with hazy ideas of what their home is worth," he says. "They may base their knowledge on a valuation they received from an estate agent last month, for example - but find that actually it's 10 per cent under this.  "Basically, even homeowners who have carried out research on house prices, and factored in what would seem an appropriate fall, could still find that their final valuation is a lot lower than they thought."