Since the introduction of the stamp duty holiday in the UK last year, buyers have rushed to enter the market, and property prices across the country have soared by nearly 10 percent.
However, as the tax concession approaches an end, the UK property market has gradually returned to normal.
Some buyers realized that they had bought houses at a premium, and their properties continued to decline in valuations by banks.
A study by real-estate agency Benham and Reeves showed that there were an estimated 390,000 flats whose bank valuations were on average 5,000 to 10,000 (HK$54,000 to HK$107,000) lower than the purchase prices.
That was equivalent to a 2.8 percent drop in UK property prices if calculated with the median of 7,500.
The average property price in northeast England fell by 5 percent, Northern Ireland 4.9 percent, Scotland 4.3 percent and London only 1.5 percent, the study showed.
The study also pointed out that London was the most affected area by the decrease in valuations.
Of the 80,000 properties sold in London last year, 47,700 were hit by lower valuations, which accounted for 59 percent.
The number in northwest England was 55 percent, and 40 percent in southeast England, but the number of flats with lower valuations in the area was the largest, at 60,000.
Northern Ireland had the smallest number of affected properties - only 12,000 - but accounted for half of the transactions there last year.
The director of Benham and Reeves, Marc von Grundherr, said that undervaluation is common in the UK property market because owners generally set a high asking price and the surveyors in financial institutions are cautious in valuation.
He suggested that property owners could look for another buyer if the valuation was too low, and they might look for another financial institution to estimate the price as well.
The owner could also wait for the property to appreciate before selling it, but it is not inevitable that the price would rise. If none of the above is useful, the owner could only lower the price.
For buyers, if the valuation was low, they might try to find other financial institutions that would approve a higher valuation, and they could also discuss the price with the flat owner again.
