E.surv Chartered Surveyors is reporting a shift towards quality by lenders when evaluating property risk.
The firm believes that a variety of factors are leading many to conclude that now is a prudent time to reconsider policy and methodology for lenders.
Property price growth has slowed or reversed for the first time in the experience of many underwriting teams at the same time that most lenders are reducing their maximum loan to values rates.
For many, the imperative to pinpoint the actual valuation of a specific property, as opposed to a likely range for a given property ‘style’ is now considered essential to minimise risk for both lenders and applicants.
In addition, for those lenders who securitise books and who are already experiencing the challenges of the ‘credit crunch’, it is understood that some potential investors are requiring a greater level of comfort in respect of valuation methodology as part of the condition of any book purchase.
In real terms, this may translate to progressively greater discounts on value for non-traditional assessment methods or indeed a disinclination to consider a purchase at all.
Richard Sexton, director of business development at e.surv, says: “Whilst overall business volumes are clearly down, we are seeing a shift in the distribution curve toward more detailed physical inspections and away from the arguably less accurate methods.”