Nationwide Building Society risks depressing new home prices through an overly strict approach to valuations, according to leading housebuilders.

Nationwide’s policy, which insists that all new properties must be valued as second-hand, threatens to cause prices to undershoot the level that buyers would otherwise be willing to pay, they said.

Several other lenders, including Lloyds’ Cheltenham & Gloucester subsidiary, operate similar valuation policies. But as the UK’s third-biggest mortgage lender, Nationwide has come in for the most criticism.

John Stewart, director of economic affairs at the Home Builders’ Federation, said that such policies were threatening to smother the tentative revival in house builders’ fortunes.

Financial Times