Halifax, Britain’s biggest lender, has been accused of undervaluing customers’ properties when they come to remortgage, forcing them on to more expensive deals.

Brokers say borrowers may see as much as 40% wiped off the value of their homes, although prices have fallen by an average 21% from their August 2007 peak, according to Halifax’s own house-price index.

The down-valuations mean borrowers no longer qualify for the lender’s best deals. Halifax charges 5.29% for its five-year fix if you have equity of 5% or less, compared with only 3.99% at 25%, a difference of £2,600 a year on a £200,000 interest-only loan.

The move comes amid growing evidence that lenders, while claiming to offer competitive deals following government pressure, are in fact imposing sneaky conditions which mean even “good” borrowers do not qualify for the best rates.

HSBC said last week it would commit £1 billion in loans to people with deposits of 10%, helping first-times buyers back into the market. This was part of the £15 billion it has already committed to lend this year, and it has previously offered a market-leading fix of 3.99% over five years.

However, one Sunday Times reader complained she was rejected, despite having the required 40% equity, because she did not have 75% of the value of her mortgage in savings — £160,000.

Neil Avery of Timothy James, an adviser, said: “We’re increasingly finding that what lenders are saying and what they are doing is very different. The outcome implies Halifax is working the property market to its advantage.”

Down-valuations

Thousands of customers who took out Halifax’s cheap two-year deals immediately before the credit crunch in 2007 are now applying to the bank for a “transfer deal”.

However, brokers have been alarmed to see the value of clients’ homes on Halifax’s online valuation system — which is pegged to its house-price index — slashed by tens of thousands of pounds in a matter of days.

The bank is then offering existing customers transfer deals at higher rates.

Avery cites the case of one client living in a substantial London home. “On Friday their property valuation according to the Halifax’s computer system stood at £1.3m. This was already down 19% on what the client paid for the house two years ago,” he said.