The impact of the continuing surveyor shortage was laid bare last week in research revealing up to four in every 10 sales fails to reach completion because of the delays buyers face in getting properties valued.
The research, by property search agent The Buying Agents, shows as many as 40 per cent of property purchases are being aborted as a result of surveying and conveyancing issues compared with the 30 per cent typically seen.
With buyers in some parts of the UK getting swept up in the rush to own their next home, the company says important questions about the properties visited are not being asked. As a result, structural or even superficial problems with the home are only being discovered later in the sales process.
The Buying Agents managing director Henry Sherwood says: “In certain areas we have seen an increase of around 10 per cent in the number of properties returning to market, which indicates there are still problems with the antiquated process of surveying and conveyancing.
“It is in the interests of everyone involved in buying and selling property to work as efficiently as possible, so we firmly believe now is the time to get industry leaders together to find the best possible solution for all parties.”
One broker, who wishes to remain anonymous, told Money Marketing he called e.surv to arrange a private valuation for a client in Brighton and was quoted an “extortionate” price. He was then told he could obtain a cheaper deal elsewhere.
He says: “It is utterly bizarre. It is almost as if the firm is deliberately trying to price itself out of the market because it simply cannot cope with the volume of business. It told me that in certain areas it was not taking on any new instructions but went on to offer an extortionate price for a private survey and bizarrely informed me that I could get a better price elsewhere.
“It leaves brokers wondering how our clients are supposed to go about getting a competitive private survey these days.”
Conveyancing firm LMS sales and marketing director Huw Lewis says: “There is an issue around valuations and the speed of getting them completed at the moment, largely owing to a shortage of surveyors that has been around for some time now. Lenders are still finding it difficult getting valuations in the time they expect to.”
In a bid to tackle the problem with delays, Santander launched a pilot scheme in July using automated valuation models, or desktop valuations, for purchases that meet
its “mortgage and property risk criteria”. Money Marketing understands two other firms are looking at adopting this valuation model for purchase transactions by the end of the year. Desktop valuations are typically used for remortgage valuations, which involve less risk.
A spokeswoman for Santander says: “To enable quicker processing of purchase applications, Santander has introduced an automated model valuations pilot for a small proportion of purchased properties that fit its risk criteria. This innovative approach to purchase applications will offer an improved customer experience, ensuring consistency and cutting property valuation times. It will also free up valuers’ capacity so they can focus their expertise on more complex cases. Santander has successfully used AVMs on remortgage applications since 2006.”
Lewis says: “This move by Santander will certainly help ease the delays in getting valuations through. If other lenders decide to adopt a similar tactic it should really help to release some of the pent-up demand and take some of the pressure off valuers.”
Coreco director Andrew Montlake has also backed the decision, especially as Santander has pledged not to down-value a property on the basis of an automated valuation.
Montlake says: “This is the key aspect. There is nothing wrong with using a desktop valuation, especially for low loan-to-value deals, as the risk is lower. But where there is a mismatch between the purchase price and the AVM, Santander is saying it will then instruct a physical inspection before making its decision.
“That is absolutely the way it should be done and this can only be a good thing for all of us. Everyone has an interest in seeing transactions completed and this goes some way to making that easier.”
Your Mortgage Decisions director Dominik Lipnicki says: “Technology is there to be used and this is one of the ways in which it can help us. Buyers do not want to miss out on their properties because of a service delay and in cases where the risk is low, such as lower-LTV deals, why not embrace what is at our disposal?
“It is the right evolution for the market and a good sign of lenders thinking proactively.”
The proportion of properties being remarketed after failing to complete, based on sales volumes of top three estate agents
Brokers have reported waiting times of up to 20 weeks to arrange a survey
Average number of surveying/valuation instructions in July, according to The Buying Agents
Up to £1,500
The cost of a Building Condition or Homebuyer Report. This is also the maximum cost of conveyancing and solicitor fees.