Mortgage lenders, underwriters, and risk officers are being urged to exercise heightened caution as new transaction data reveals a widening gap between seller asking prices and independent property valuations.
According to the Q2 2026 Property & Homemover Report published by property market intelligence specialists TwentyCi, the average newly listed property in the UK is now priced 11.6% higher than its independent Automated Valuation Model (AVM) value. This gap has doubled in the space of just 12 months, rising from 5.7% in Q2 2025.
This growing disparity poses an immediate operational challenge for mortgage providers. As sellers set ambitious asking prices that fail to align with real-world valuations, lenders face an influx of down-valuations later in the mortgage journey. This inevitably stalls lending pipelines, triggers renegotiations, and increases the rate of collapsed transactions - all while adding significant friction to the homebuying process.
A Structural Shift in Seller Expectations
The report highlights that this is not merely a handful of isolated incidents, but a systemic shift in the market. The share of UK properties listed at 10% or more above their true market value has increased by 9.7% year-on-year.
The East of England has seen the most dramatic surge, with the volume of properties overpriced by 10% or more jumping by 19.3% compared to last year. Outer London (17.8%) and the South East (16.7%) both also saw significant growth in overpricing.
Conversely, Inner London and the North East have bucked the national trend, displaying price corrections that align more closely with actual market values.
For risk committees and credit teams, the widening gap represents a hidden threat to automated lending metrics. Because headline market data is frequently anchored to initial listing prices, it can paint an overly optimistic picture of market health and growth.
Without robust, independent valuation checks, lenders risk over-exposure or operational bottlenecks as underwriters work to reconcile reality with seller optimism.
"While a busy market is always welcome, this widening gap between what sellers want and what properties are actually worth should serve as a clear warning sign for the lending community,” says Colin Bradshaw, CEO at TwentyCi. “If listing prices drift too far from independent AVM values, down-valuations will inevitably spike. For lenders, this means clogged pipelines, increased administration, and higher fall-through rates. Relying solely on listing-led indicators right now is a risk; robust, independent valuation data has never been more critical to protect lending security."
To read the full report click here.
