By Mark Blackwell, Lending and Surveying Services Director, eTech Solutions
Mortgage Solutions October 2015
To paraphrase Rogers and Hammerstein, ‘the broker and the valuer should be friends’. Part of the same value chain, both have a healthy interest in the success of the UK property market yet the relationship between a broker and a valuer is often a fraught one.
The value of a property is integral to the procuration fee paid, and as such, while the valuer works for the lender, there is always a healthy chance the valuation may not reflect the broker’s or the client’s opinion.
The derivation of value, and the robustness of the methodology, is constantly under review. The RICS redbook is updated to reflect changes in thinking about sustainability and new build issues to name a few. Arguments over actual value aside, brokers are rarely as upset than when capacity threatens to strangle the market.
As a result of the credit crisis, regulation and commercial scrutiny have focused on sales, distribution, and financial prudence. In a market now intent on de-risking, and retrieving the margin lost to more rigorous regulation at the front and back end of the business, the focus is turning to managing operational risk and asset risk. This means re-engineering the valuation process.
Of course, on one level this is not entirely new. Automated Valuations (AVs) have been in place for some time dealing with remortgage and a limited volume of purchase business as well as underpinning the value of securitsations.
However, the scale of what is being considered now is breathtaking by comparison. This has major ramifications for brokers, whose new business if it is vanilla enough may never hit a valuer’s desk – but equally, if it is a difficult case, they will know an expert is looking at it and this will impact turnaround times. The actual physical valuation may therefore take slightly longer but will nevertheless be delivered more quickly with fewer valuations overall being required.
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