Down Valuation risk - Over asking price

ChapelHillCollective

Obviously precedent for similar properties being sold in the nearby area will factor into this, which I'm not able to give here. But just looking for experiences or expert advice on risks posed by going beyond the asking price on a property that already seem to be on the market at roughly the right amount. 

From comparing the pictures from previous sale to current sale there doesn't appear to have been any major improvements made to the property since it was purchased in 2017. Although it's hard to be sure for definite.

I've managed to glean the following property value information from land registry and various other online sources.

• The property is currently on the market at £240k.

• It was last sold in March 2017 for £191k (originally on the market at £194k)

• That's an approx. 26% increase between what was paid and what is being asked for.

• Even if taking the original asking price that's an approx 24% increase.

• For the local area the average value of semi detached properties has risen between March 2017 and March 2021 by approx. 18%.

• If we take the 191k paid for property back in 2017 and add the 18% that comes to £225380.

• If we take the 194k originally asked for and add the 18% that comes to £228920.

• Since February 2021, Zoopla estimates that price rises for this area have been 1.53%.

• So that would take the potential value up to £232k.

• That to me looks like the property remains approx. 3% overvalued.

Considering current market conditions that seems fairly reasonable. However as market conditions currently mean that properties in the area are going for above asking price, what is the risk of a a mortgage lender down valuing the property if we were to offer above asking?

What would be an acceptable upper limit for this property based on the data provided? (e.g. 0%, 1%, 2%, more…)

Any help appreciated.

user1977

Market value is mainly calculated using comparable figures from recent sales of nearby properties (rather than adding a percentage to the last price for this property) so I would concentrate on those.