Three major lenders are looking to use desktop valuations for house purchase transactions – a move brokers believe will put an end to the severe valuation delays to hit the market over the past year.
Santander has launched a pilot scheme where it will use desktop valuations for purchase applications and Mortgage Strategy understands two other high-street giants are planning to follow suit. Desktop valuations are usually used for remortgage cases.
Over the past year, the market has been dogged by severe delays in the valuation market due to a lack of trained surveyors willing to do valuation work.
In April, a Mortgage Strategy mystery shop found that some major surveying firms had stopped taking on new instructions in certain hot-spots and others were quoting waiting times of two weeks or over.
Brokers have hailed Santander’s decision to switch to desktop valuations and believe it will put an end to the delays the market has witnessed over the past year.
Your Mortgage Decision director Dominik Lipnicki says: “The delays of the last year or two have been horrendous. We’ve had to wait weeks and weeks in some cases to get a valuation and anything that speeds that up is the right evolution for the market.”
Santander will use an Automated Valuation Model, which calculates property valuations using a statistical model. The lender will only use AVMs for “certain” property types and if the property is down-valued, a surveyor will be sent to value the property.
A Santander spokesperson said: “This approach will offer an improved customer experience; ensuring consistency and cutting property valuation times. It will also free up valuers’ capacity so they can focus on more complex cases.”
Coreco director Andrew Montlake says Santander has set up its AVM programme in the correct way as it says it will not down-value properties on the basis of a desktop valuation. He says: “This is definitely a good move for the market because Santander is doing it in the right way. To say they will not down-value a property based solely on a desktop valuation is the key point in this.
“There is nothing wrong with using AVMs as they speed up the process, which of course has been affected by surveying delays in recent times, and with lower LTV deals the risk is low.
“But if there is a mismatch between the automated valuation and the purchase price, it is absolutely right to then send out a valuer to carry out a physical inspection. Any other lenders looking at using AVMs should hopefully follow suit and run them in a logical way.”