Brexit and interest rate rises will expose shortage of valuation
surveyors, EDM MSS warns
3rd November 2016
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, EDM Mortgage Support Services (EDM MSS) warns.
The sharp fall in sterling following the Brexit vote has prompted speculation1 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, EDM Mortgage Support Services, says.
More extensive use of technology will help the industry address the problem, however. Joe Pepper 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.”
He says 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’ new 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.
Joe Pepper added: “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.”
The overwhelming majority (93%) of delegates who attended an industry roundtable1 organised by EDM MSS agreed that organisations should work more collaboratively to share property data for the good of the industry and 70% agreed that processing costs could be reduced if they did so.
In its response to the government’s consultation document on improving the consumer landscape2, EDM MSS said that implementing new technology and sharing property data will create a far richer experience for brokers and their clients, as well as play a key part in fulfilling seven-day mortgage switching.
1National Institute of Economic and Social Research saying that it forecasts inflation will rise in the UK from a current 0.7% to 4% next year because of the falling pound.
NOTES TO EDITORS
1Source: 27 mortgage professionals, including brokers, lenders and valuers, April 2016
2Source: Department for Business, Innovation and Skills, May 2016
About EDM Group: Headquartered in London, EDM Group employs over 1,400 people across the UK and US. For the financial year 2014/2015, the firm reported an annual turnover of £70 million. In September 2015, EDM Group was ranked 43rd in the annual Sunday Times Hiscox Tech Track 100 league table, up from 57th in 2014 – a reflection of the fast-growth success of the firm and its position as a leading, global information management and digital transformation specialist. In June 2016 EDM Group was ranked number 1 in the annual Sunday Times HSBC International Track 200.
EDM Group combines best-practice consulting and technical experience to develop bespoke outsourced solutions for a range of clients across the private and public sectors. The success of the firm has been built on its powerful Digital Mailroom document scanning and storage capability, which continues to be a core, in-demand product offering. EDM Group’s growing client base spans sectors including financial services, automotive, professional services, private healthcare, and the public sector (central and local government, and NHS). Specific clients include HMRC, Legal & General, Friends Life, Bupa, Avis Budget EMEA Ltd, Nationwide Building Society, Barclays, Santander, Companies House, Lloyds Banking Group, Grant Thornton and healthcare providers including NHS Trusts and BMI hospitals.
EDM Group is accredited to ISO standards for Information Management Systems (ISO27001), Environmental Management (ISO14001) and Quality Management (ISO9001).
About EDM Mortgage Support Services: EDM MSS offers a range of technology products to help clients manage the various stages of the mortgage process. It enables lenders to receive and exchange data with third parties such as surveyors, solicitors, brokers and asset managers securely and cost effectively. The platforms, including PRISM (Portal for Risk Information Sharing in Mortgages), Residential and Commercial Valuation Exchanges and LPA Exchange support key transactions within mortgage lending. EDM MSS’ customers include Nationwide, Santander, Bank of Ireland, Barclays, One Savings Bank, Virgin Money and Lloyds Banking Group.
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