The firm is also working with its lender affiliates and partners to help them meet their TCF obligations as laid down by the FSA and other industry bodies.
e.surv is providing information and consultation to lenders to ensure that all consumers receive most suitable advice about the range of survey options available to them, and the most appropriate course of action for their individual circumstances.
Richard Sexton, business development director of e.surv, says:
“It’s vital that consumers are aware of the consequences of not getting a survey, and are given clear information about the range of options available to them. Lenders need to make it clear to their customers that a mortgage valuation won’t give them the full information about the property.
"We are working closely to help lenders offer more transparent advice to customers about private surveys. Giving better advice before, during, and after the homebuying process will help lenders ensure they meet their ‘Treating Customers Fairly’ obligations.”
Research by the firm, the largest surveyor in the country, found only one in five customers take out a private survey. e.surv says the lack of understanding also represents a danger to lenders’ investments.
A failure to take out a private survey costs buyers on average £1800 to repair hidden defects in their home. In some cases, this could mean borrowers cannot keep up with their monthly mortgage repayments.
The firm’s sister estate agency brands have launched a ‘Sold Subject to Survey’ campaign as part of efforts to educate consumers on the difference between the various types of surveys available, and a similar offering is being rolled out via Financial Services Networks, Pink Home Loans and First Complete.
e.surv has developed a multimedia campaign which discusses the importance of getting a survey, and the various options available to consumers. e.surv has created an ‘information centre’ on their website to help educate consumers about the range of surveys available to them and the benefits of each report type.
In spring 2011 the firm trialled the new RICS Condition Report exclusively with one lender. As part of the trial, e.surv conducted a telemarketing campaign with the lender’s customer base. All customers were contacted by e.surv and were given advice about the most appropriate product for them.
Richard Sexton says:
“Educating consumers on the importance of a private survey, and the type of survey most appropriate to their situation, isn’t just of great benefit to them, it’s also in the best interests of the lender. A valuation protects their investment, but a private survey guarantees it.
"If borrowers are hit by unexpected repair costs as a result of not taking out a private survey, they are more likely to default on their monthly repayments - and that represents a business risk to lenders.”
In October 2010 e.surv began research into consumer attitudes to private surveys. It found consumers fail to take out a private survey because of confusion over the difference between a lender’s valuation and a private survey.
Some professionals in the homebuying process are failing to offer appropriate advice and not making it clear that a valuation is for the lenders benefit and isn’t designed to spend potential defects that are of interest to the consumer.
The research also found that, despite typically costing less than 0.5% of the value of the property, many consumers view a private survey as an unnecessary expense.
Richard Sexton says:
“Private surveys have been perceived by consumers as technical, overly-complicated reports that are an unnecessary expense in an already expensive process.
"Many of them are poorly advised by professionals and are not receiving suitable advice that takes into account their individual circumstances. They don’t realise that a valuation is not for your benefit but to help the bank assess how much to lend.
"Even those who do receive good advice can’t always see past the upfront cost of the survey. They baulk at the price tag and hope they’ll be fine without it, even though it’s an investment on the most importance purchase they’ll make.
"Indeed, Section 4.4 of the CML lending handbook warns borrowers not to rely on the lenders valuation and to seek independent advice.”
