Tracey Bailey, Head of Residential Underwriting, Blemain Group, explains:
“The property market is poised for a strong and sustained recovery. However, the industry as whole, including surveyors and their insurers, must recognise the need to serve all parts of the market or this recovery could falter.
“Where surveys are delayed, there’s an increased chance of the loan application not proceeding and in some instance the series of chain events involved in the transaction collapsing entirely.
“It’s a real issue, as second charge and other specialist lenders are being impacted – in many cases to the same extent as the traditional first charge residential mortgage market. We’re hearing reports of customers losing the property the want to buy due to the extended period to obtain the survey.
“No one single segment can be viewed in isolation – if someone is taking a secured loan to make home improvements or consolidate credit and they are having to wait several weeks to have a survey completed, it can have severe knock-on effect.
"The customer’s journey is adversely impacted as they have to wait for the valuation to be completed and when a survey is cancelled at short notice it causes significant inconvenience to the customer. These delays also impact on the underwriting process – checks and documents that are time sensitive often have to be redone as they have expired, leading to yet further delays. Also, if investors are looking to release equity from existing property to fund additional purchases, any delay will hamper these efforts and withhold much needed liquidity from the market.”
Recent figures from the Finance & Leasing Association for secured loans show that since the number of new business agreements reached a low in December 2010, demand has increased by more than 60%.
Tracey Bailey continues:
“It’s encouraging to see some surveying firms recruiting and training more people in the right locations, the whole industry needs to play an active role. Insurers need to support surveyors, providing affordable cover as necessary.
“Equally, lenders like Blemain Group need to play their part, ensuring they participate in essential engagement and education activities to help people realise how the situation is impacting the industry as a whole.
“The property market is as much about confidence as it is the provision of service. A lack of surveyor capacity spans both of these elements – if borrowers and their brokers don’t have certainty in the provision of surveying services, confidence will waiver and the recovery could be delayed unnecessarily or potentially stall.”
Blemain Group’s own research shows that 80% of brokers are expecting to grow their business in 2013, with almost two-thirds (63%) saying they anticipated that this will include a focus on secured loans.
According to recent figures from the Royal Institution of Chartered Surveyors (RICS), there are currently 8,500 residential valuers registered in the UK, of who 5,500 list residential valuation as their primary activity, and around 2,000 of which work for the largest 20 firms in the UK.
