The market for Automated Valuation Models is set to treble in the next two years as mortgage lending remains strong and lenders increase their uptake of online valuation services to streamline and improve the mortgage application process, predicts Hometrack.
Hometrack has been at the forefront of this evolving market and continues to increase its lead in the industry.
It is expecting its turnover to surge by 100% this year and predicts that by 2008 AVMs will account for over 60% of mortgage valuations up from around 20% currently and only 10% last year.
With the advent of AVMs, providing instant valuations, lenders are able to offer their customers an improved and more efficient service including instant mortgages at point of sale.
Hometrack confirms the view that at least six medium to large lenders will be offering an instant mortgage by early 2007.
David Catt, commercial director of Hometrack, says: The AVM market has increased enormously over the past two years.
Hometrack has been the pioneer of AVMs in the UK and remains at the forefront of this expanding market, with mortgage lenders representing over 70% of the market using our AVM.
Reflecting this, our dedicated AVM team has increased from seven to 21 in the last 12 months.
The expansion in this market is going to be phenomenal and on the back of our success within the lending community we are anticipating new players will enter this maturing market.
As such we believe a milestone has been reached and welcome this competition in the belief that this can only be beneficial to the market as a whole.
Despite the governments recent change of mind on the introduction of mandatory Home Condition Reports within Home Information Packs, the legislative process has lead to a greater awareness of AVM technologies.
Therefore, regardless of the final decision on the introduction of HCRs, Hometrack believes that the use of AVMs will continue to rise.
Catt adds: The decision to remove the mandatory HCRs has had little impact on Hometrack.
The whole HIPs debate significantly raised the profile of AVMs.
However, lenders had already recognised the importance of AVMs specifically for point of sale mortgage years ago, and this was irrespective of HCR introduction.
Utilising proprietary technology developed in-house over the last five years, Hometrack says it has the worlds most accurate AVM based on comparison to performance figures that are published by US providers, deemed to be the pioneers of AVMs.
The online valuation service significantly reduces costs for mortgage lenders as the AVM offers a much faster and less expensive valuation procedure.
Catt adds: We believe we have become the significant market leader as a direct result of both our unrelenting commitment to delivering a highly accurate and predictable AVM and our now extensive experience in providing a straightforward and value-added implementation service to our clients.