Press Releases

Lenders review policy on valuation approach, says e.surv Chartered Surveyors   10/03/2008

e.surv Chartered Surveyors, the UK’s largest distributor of valuation instructions, is reporting a huge shift in lenders’ approach to assessing property risk.

e.surv believes that a variety of factors are leading many to conclude that now is a prudent time to reconsider policy and methodology for lenders. Property price growth has slowed or reversed for the first time in the experience of many underwriting teams at the same time that most lenders are reducing their maximum loan to values rates. For many, the imperative to pinpoint the actual valuation of a specific property, as opposed to a likely range for a given property ‘style’ is now considered essential to minimise risk for both lenders and applicants.

In addition, for those lenders who securitise books and who are already experiencing the challenges of the ‘credit crunch’, it is understood that some potential investors are requiring a greater level of comfort in respect of valuation methodology as part of the condition of any book purchase. In real terms, this may translate to progressively greater discounts on value for non traditional assessment methods or indeed a disinclination to consider a purchase at all.

Richard Sexton, director of business development at e.surv commented: “Whilst overall business volumes are clearly down, we are seeing a shift in the distribution curve toward more detailed physical inspections and away from the arguably less accurate methods.”

e.surv has also reported an increase in the number of Homebuyer and Building Surveys being requested by applicants. “Perhaps recent publicity regarding the potential future for the property market has focused consumer’s minds on the need to understand the asset they are investing in. Given that this is the largest purchase many people will make, we are pleased to see consumers opting for this increased level of protection. Lenders are also taking their TCF responsibilities seriously and are encouraging applicants toward this route, particularly if the lender themselves has not commissioned a physical inspection.” concluded Sexton.