60 Seconds with...Simon Davies

6 September 2010 | By Christine Toner

Why is the government investigating house price indices?
In recent months we have seen conflicting house prices and trends from the different indices which have caused confusion. I am sure the reason for this investigation is that the government recognises the need for consistent and reliable statistics in a sector where confidence and sentiment are important factors. At present government agencies produce two of the sets of indices, surely they only need to publish one which provides clear information for everyone to understand.

Why do house price indices differ so much?
The array of indices in the market are produced from various sets of data or data taken from different stages of the property transaction such as asking prices, valuations, mortgage lending or competition figures - this is why there are conflicting results. House price movements are big news as they impact on our feelings of prosperity. Less sensational media reporting of national house price statistics would be helpful as they rarely reflect the local market.

How important are automated valuation models?
They are important as they are excellent tools for assessing loan portfolios. The challenge is to integrate them further into the front end valuation process. Valuer capacity will be an issue as the market recovers and I believe that the increased use of AVMs in the hands of valuers for mortgage valuation under the right circumstances is to be welcomed.

Where do you think house prices will go from here?
Greater minds than mine are struggling with this one. Demand and supply factors affecting prices are more complex than ever. The fragility of the economy suggests that the next 18 months will see fluctuating values, with some regions faring better as the recovery gathers pace. Beyond that, who knows but I do wonder if this government will step in to try to prevent the resumption of the normal property cycle.

What’s next for Valunation?
Having recently moved into the new Spicerhaart Group offices in Colchester, we are gearing up for the recovery. It has been a tough few years.
We are a leaner business than three years ago, and have taken the opportunity to review our procedures with quality and business risk at the forefront.

Interview by Christine Toner

If you enjoyed this article, sign up here to receive daily email updates from Mortgage Strategy and Follow @mortgagestrat