LSL Property Services, the parent company of a number of firms including estate agency brands Your Move, Marsh & Parsons, and Reeds Rains, is to make further provision in its accounts against claims relating to alleged over-valuations in the past.

The extra provision could dent the company’s profits by as much as £25m. LSL had been expected by broker Numis to make £40m pre-tax profits this year.

The firm had already made a provision of £12m.

Separately, the company announced that its finance director, Steve Cooke, has left the business with immediate effect.

On Friday, after LSL made the announcements, its shares fell by 6%.

The claims relate to what LSL calls the “high risk lending period”of 2004 to 2008 – a period where there was sub-prime lending and high Loan to Value mortgages.

Lenders typically make claims on repossessions if they believe the original valuation was wrong, and where they have sold the property at a loss.

Lenders are said to have become much more aggressive in pursuing claims.

LSL noted in Friday’s statement: “High levels of claims relating to this period [2004-8] have continued to be an industry wide problem.”

The original £12m provision in LSL’s 2013 report and accounts included an increase in “incurred but not reported” cases.

The 2013 report says that this was the board’s “best estimate of future claims”.

However, a detailed review has now identified “a number of material issues”.

A greater proportion of existing notifications are deteriorating into claims, while the average cost per claim is greater than anticipated.

In addition, even though the primary limitation period has ended, LSL now expects to receive new notifications and claims next year “and beyond”.

As a result, the board is to put an additional exceptional charge into LSL’s accounts for the year ending December 31, 2014. This will be in the range of £20m to £25m, but the final figure is subject to further review and external audit.

It is not the first time that possibly over-optimistic valuations during the boom years have troubled LSL: in August 2012, it announced a pre-tax loss of £7.9m for the first half of that year, having had to set aside £17.3m to cover claims against its valuations business.

LSL’s announcement on Friday did go some way to mitigating its news, reassuring investors: “The underlying business remains extremely cash generative and balance sheet leverage remains at modest levels, and as a result the Board remains confident in its current dividend policy.”

Countrywide has also had problems with historic “over-valuation” claims.