Buyers of new city-centre flats may be paying tens of thousands of pounds more for their properties than they are worth, according to the Council of Mortgage Lenders (CML).

The CML, whose members handle 98% of UK lending, accuses some valuers — who should independently assess a property’s worth ahead of a mortgage being agreed — of simply rubber-stamping developers’ asking prices.

It has twice written to the Royal Institution of Chartered Surveyors (Rics) complaining about the problem, and says some valuers have failed to consider whether flats were overpriced and may not have known about price cuts secured on similar properties nearby. It cites an example of a new two-bed flat in Nottingham initially valued at £250,000. A second valuation, taking into account prices paid elsewhere in the same development, reduced it to only £170,000 — so buyers with big mortgages could end up with negative equity if they need to sell.

“So far, we’ve had no reply from Rics,” says Christopher Dean of the CML.

The Mortgage Works, the specialist mortgage lender of Portman building society, last week announced it will no longer lend on new-build buy-to-lets because valuation “is more of an art than a science”, says director Matthew Wyles.

John Heron of Paragon Mortgages, a large buy-to-let lender, says there is a “lack of transparency” about pricing some brand-new flats.

Since 2000, there has been a proliferation of such properties. Estate agent Knight Frank says almost 4,000 were built across Leeds, Liverpool, Manchester, Newcastle and Sheffield in the year to April alone; more are at planning-application stage or still being built.

Leeds has another 7,000 city-centre flats coming on; Manchester has 4,800; Sheffield, 3,300; Liverpool, 4,500; and Newcastle 1,700. Add “anticipated” development (what may be built after 2008), and there’s another 15,000-plus units across just these centres.

It’s a similar story in Bristol, Birmingham, Nottingham and Southampton. About 175,000 new homes in London have been approved, but have not yet been started. About 90% are flats, and most are “Turkey Twizzlers”: basic two-bed, two- bathroom flats, built mainly for buyers who rent to young professional sharers.

Calculating the real value of these properties can be hard. Developers often try to sell the first ones in a development at full price, to influence valuers’ assessments of later flats in the scheme. There are also industry rumours that developers have sold first flats to friends and family at inflated prices, again to establish a precedent to influence later valuations.

Those most likely to be lured into paying an inflated price are people buying just one flat, either to live in or to let.

Wealthier, large-scale landlords or professional consortiums are unlikely to suffer: they can secure big price cuts as they buy flats in bulk.

Andrew Smith of Rics dismissed the CML concerns as “an unspecific allegation, and as such it’s not top of our agenda”. He was “90% sure” no written complaint had been received, but admitted the issue of “wonky valuations” had been raised by the CML at routine meetings. Smith said Rics members follow procedures set out in what industry insiders call the “red book”. This says valuations should be based on a mix of asking prices, incentives and comparisons with similar homes on sale in the second-hand market.

The CML’s claim is the latest blow for buyers of such flats. An oversupply has seen prices drop; more falls are predicted for next year, particularly in the north, and rental yield forecasts are gloomy.

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