Hometrack has launched Failsafe, a new product aimed at safeguarding mortgage lenders against the risk of residential property overvaluations.

Housing transactions are now at a level not seen since the 1960s. For valuers, this makes the job of finding good comparables on which to base valuations, increasingly difficult. Furthermore, a shift in the proportion of new-build, forced sales and repossessions is confusing the actual price point for individual properties. The consequence of all this is an increased risk of inadvertent and even fraudulent overvaluation which in turn is leading to greater risk and hence losses to lenders. Based on current market forecasts an estimated £200m will be lost through mortgage repossessions from originations in 2009 alone.

David Catt, Hometrack’s chief operating officer, said: “Failsafe enables a user to measure the difference between a surveyor’s valuation and the Hometrack AVM on a case by case basis. When a surveyor has apparently overvalued a property compared to the AVM by a user-determined amount, the Failsafe will trigger and alert the user to the discrepancy, enabling the user to seek a second opinion.”