The Green Factor

Peter Stimson, Managing Director of Landmark Quest, features in the March edition of industry publication, Mortgage Finance Gazette, discussing the topic of the importance of understanding environmental risks in making mortgage lending decisions.  

Peter suggests that  the use of environmental data in the mortgage application process can be used in one of two definitive ways to help lenders understand any potential risks: as a means of providing some certainty to other checks lenders conduct, such as Automated Valuation Models, in addition to providing surveyors with additional support and direction in the valuation process: 

The Green Factor

"Those of you who have worked in the mortgage market like me, for a number of years, will have noticed how much things have changed over the last 20 years. Mortgages have gone from a local relationship with a branch where cases where manually underwritten to a large centralised administration unit, where the bulk of cases will barely be seen by an underwriter.

Whilst some may pine for the days of being able to talk through cases locally and get those ‘exception’ cases through, the stark reality is that, from a bank’s perspective, all the automation and centralisation has resulted in two clear outcomes.

Automation
Firstly, it needs less people and hence less money to process cases. Secondly, the standardisation of risk and criteria and the use of technology, in particular credit scoring, has had a dramatic output on default rates. Whilst an exception case may turn out to be an exception and perform well, they are generally never the rule.

In my view, the game changer in risk occurred in the early 1990s with the advent of credit reporting. Rather than relying on an applicant’s honesty (or otherwise) and a few paper checks, it becomes apparent (to some lenders much later than others…) that you could tell an awful lot about an applicant and particularly his propensity to repay simply by looking at his previous history.

Surveyors
Whilst the mortgage process has changed, one aspect however remains very much the same as it ever was: the property risk assessment. In over 95 per cent of instances there is still a reliance on a physical inspection and the same pressures on a surveyor to get it right or ultimately down the line, risk being sued.

This reliance on a surveyor does put pressure on the whole process and ultimately is often the reason why mortgage offers take as long as they do. Whilst surveyors are putting in place processes to address some of the issues that occurred in the market last year, particularly in and around London, the fact remains that a lot more could be done with the available data in the market, either to reduce surveyor pressure at peak times of demand or, to assist the surveyor in getting the job done right."

To read the full article - visit the Mortgage Finance Gazette website.

Landmark and SAVA join forces to enable Home Inspectors and DEAs to achieve AssocRICS

We are delighted to announce that Landmark Information Group, has joined forces with the SAVA School of Surveying to deliver a brand new Diploma course that enables direct entry as an Associate of the Royal Institution of Chartered Surveyors (AssocRICS), and increases the number of qualified surveyors that can undertake residential surveys and valuations.

The course provides qualified Home Inspectors, DEAs and new entrants with a tailored pathway to qualify as an AssocRICS and extend their credentials to conduct all residential valuations, offer RICS surveying products or, by joining the SAVA Scheme, to offer the Home Condition Survey – SAVA’s own home purchaser survey carefully tailored to the needs of the buyer. 

The new course not only gives Home Inspectors and other individuals the opportunity to extend their careers, but also supports the wider surveying industry by introducing new talent and improving overall capacity.

Peter Stimson, Managing Director – Landmark Quest, Landmark Information Group comments: “By working in partnership with SAVA, the new Diploma course provides Home Inspectors with an opportunity to extend their credentials so they can conduct valuations for surveyors, panel managers and mortgage lenders.  Landmark already supports surveyors and Home Inspectors with the data they need to make informed decisions when reporting on a property, combined with the technology to help deliver the process.  Now, with the new Diploma NVQ, we are helping to bring new blood into the industry, which is great for Home Inspectors and the wider industry as a whole.”

Chris Rispin, Managing Director, Bluebox: “Whereas previously, it was a requirement to be at a Member of RICS (MRICS) to conduct valuations, the AssocRICS qualification is now recognised by the industry as an appropriate standard.  SAVA and Landmark is pleased to launch the new Diploma course to enable Home Inspectors to extend their experience into the residential valuation space, while helping to fill a hole in the market for qualified experts in this field.”

Peter Bolton King, Global Residential Director at RICS welcomed the new qualifications. “The DipRSurv & Val provides a new and sensible route into residential surveying and valuation for new entrants that wish to concentrate their careers in these fields. The increasing demand for surveys and valuations is stretching the available resource of qualified professionals and the new qualifications are extremely timely. We look forward to welcoming many of the people that achieve these new qualifications into the RICS fold.”

The course is conducted over an 18-month period and includes a range of theory and practical assessment levels, delivered via a mix of face to face training, distance learning and practical assessment. It is hosted at the SAVA School of Surveying in Milton Keynes and is available for an inclusive, packaged fee from £5,940 depending on the entry route.  The next course intake starts in May 2015, with bookings being taken now. 

For more information, telephone 0844 844 9952 or visit www.landmark.co.uk

Valuation – capacity and fraud control

Having focused last month on lenders’ use of property data to manage valuation selection and therefore capacity issues, it has been interesting to see the media focus on the issue as mortgage brokers and consumers feel the effects of longer turn-around times in areas of peak demand.

Peter Bolton-King, Residential Director of RICS, last month commissioned an enquiry to consider the challenges facing property valuation, and a BBC radio programme focused on supply and demand fluctuations driving valuation fees downwards.  It is clear that this trend will reverse in today’s environment of raised professional indemnity costs and rising demand as the heat is felt of a market on the rise.

In the same BBC programme, Richard Sexton, Business Development Director at e.surv was keen to place matters in context, rightly pointing out that the large panel managers who service the majority of mortgage lenders still have average valuation turn-around times measured in days not weeks, which in the overall framework of a home move likely to take several months, will only impact consumers in a small minority of exceptional cases.

Surveyors are particularly focused on process improvements, and recent experience of rolling out our mobile technology platform amongst over 1000 of the country’s busiest valuers has shown that efficiency improvements are achievable, which combined with an industry wide recruitment drive is growing overall capacity.

So, whilst industry capacity is a concern, and something the lending community is particularly live to, it’s clear that between data driven decision making and technology driven efficiency in the surveying process itself, this is an issue which can be managed effectively.

Landmark Quest, part of Landmark Information Group, continues to work with both lenders and panel managers to ensure that whilst solutions are targeted at assisting with capacity concerns, they also have a keen eye to ensuring a risk-based approach can be demonstrated to regulators.  In addition to this we find ourselves applying a wider range fraud detection and control to all of our clients’ solutions as it becomes key to show that whilst some of the market excesses of the noughties appear to be returning, systems and controls are now available to ensure risk is absolutely minimised.

Richard Groom

Product Development Director, Landmark Information Group