Will rising inflation expose a shortage of valuation surveyors?

There are too few valuation surveyors to deal with the greater demand for their services that will follow a rise in interest rates sparked by Brexit, warns EDM Mortgage Support Services.

Related topics:  Finance News
Rozi Jones
4th November 2016
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"It will only take a small rise in interest rates for borrowers to shop around much more again but then the valuation profession will have a big capacity issue."

The sharp fall in sterling following the Brexit vote has prompted speculation that interest rates will have to rise to tackle inflation brought about by higher import prices. Higher interest rates will then prompt mortgage borrowers to shop around more for the best deals and boost the demand for associated valuations, EDM MSS says.

Yet the number of valuation professionals has decreased steadily since the financial crisis because of a dramatic drop in business and a shortage of new recruits, Joe Pepper, Managing Director of EDM Mortgage Support Services, says.

He commented: “A lot of borrowers are paying historically low fixed and tracker rates at present with very little incentive to move and re-mortgaging volumes are at a low ebb.

“It will only take a small rise in interest rates for borrowers to shop around much more again but then the valuation profession will have a big capacity issue. For example, there was an uptick in the market in 2012/13, especially in London, which caused long delays for lenders and lots of customer aggravation. If that happens on a wider scale it would be very challenging for the customer experience.”

Pepper added that surveyors could cope with an increase in demand if they were to make greater use of technology to streamline the valuation process and allow more triaging of valuation assignments.

EDM Mortgage Support Services’ PRISM product facilitates such triaging by providing a central platform of information and enabling users to sift out properties that do not require valuations because sufficient data already exists.

Pepper said: “There are many benefits from such a system. A key one is that it will allow lenders to make decisions in principle on the suitability of a property as an asset within seven seconds, improving the customer experience and enabling lenders to consider variable application fee models. Reducing the volume of work for valuers will also enable them to focus on more challenging properties and reward them accordingly.

“Using data to streamline the processes and number of valuations is a win for everybody involved, including brokers and their clients too so the status quo is not sustainable in the long term.”

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