How is the surveying sector faring in the credit crunch?
There have been a number of casualties in the past couple of years due to steep rises in professional indemnity insurance premiums and reduced volumes, particularly in remortgaging. Some established firms and smaller local outfits have been unable to survive.
Big corporate panel managers have had to hold onto work volumes to keep their own surveyors busy at the expense of smaller local firms. Of course, some established firms had extensive exposure to the sub-prime market and these have suffered badly. There’s a danger this will result in a lack of supply of surveyors as the market recovers in the next few years.
What have been the biggest changes?
Lenders’ emphasis has changed from using valuations to drive mortgage sales to controlling risk. Valuation panels have been cut and the lack of lenders in the market has concentrated more power in the hands of corporate panel managers with large inhouse teams.
What’s your prediction for house prices this year?
I expect growth of between 2% and 3% if supply and demand remain consistent and the Bank of England base rate stays at 0.5%. But a lot will also depend on the outcome of the general election, the health of the mortgage market and unemployment trends. Price growth is subject to location and national statistics can be distorted in times of low transaction volumes.
Did house prices fall as much as expected?
No, but nobody expected the base rate to drop to 0.5% as quickly as it did. A lower number of properties coming onto the market coupled with fewer transactions helped to maintain asking prices.
What’s in store for the surveying market this year?
There will continue to be a focus on risk management and pressure on pricing. Volumes will remain low so the traditional model of a large business with a fully employed workforce will evolve into a mixture of part-time and full-time surveyors.
But provided robust risk management processes are in place lenders should not fear this development.
I’ll also be interested to see what happens with Home Information Packs, and if Home Condition Reports or single surveys come back into play.
Interview by christine toner