The search for the instant online valuation will help provide intermediaries and their clients with an immediate online offer. Lenders have instant decision tools that can give a binding decision subject to valuation but it is the valuation process that is delaying a definitive change in the process.
A number of companies are working on the data and systems required for an instant database valuation of residential property but this will take sometime to develop fully to the satisfaction of lenders and the banks that securitise mortgage portfolios. However, the instant valuation has taken a step forward with an innovation from Quest Associates.
With a strong emphasis on technology that significantly improves the business competitiveness for their clients, Quest has grown to be the market leader in the provision of mortgage valuation systems. It handles in excess of two million cases per year in more than 7,000 installed sites, which represents over £200bn of lending security.
Quest’s clients include most of the UK’s main mortgage lending and valuation organisations, plus many of the small to medium-sized players, producing a client base of over 7,000 users. The company has now produced the Computer Assisted Re-Appraisal. This is a halfway house where a valuation is undertaken without physically inspecting the property by use of an up-to-date database of house price movements and an offsite appraisal by the valuer who undertook the last valuation.
The CAR instruction is sent to the valuer who last physically inspected the property and the Quest system will then present the surveyor with the original valuation report onscreen and with an ‘uplift’ calculation based on similar properties in the area. The surveyor combines the original report, the computer generated area uplift calculation and their local knowledge to provide the CAR report.
The CAR is not as accurate as a full property inspection, but is more accurate than using only a database valuation. It also allows the lender to match the valuation service to the loan’s risk profile. The CAR is a fast-track, cost-effective method for arriving at an accurate property valuation, backed by professional indemnity insurance.
This system could comfort lenders in terms of risk profile because they can rely on the professional indemnity of the valuer and can select the valuer in accordance with normal lender panel criteria for experience and location. But the CAR valuation should be used only by the lender to asses risk and not published to other parties. Valuation assumptions will include the date of the property’s last physical inspection and a statement that the property is being valued in the same condition.
This is the type of innovation the industry needs if it is going to drive up the level of service given to intermediaries and their clients. It will also help to drive down the cost to lenders as they can have this information almost instantly over the internet at a fraction of the cost of a full valuation.