When it comes to valuations, the service available to mortgage applicants has progressed significantly since the millennium.
This has largely been driven by the proliferation of Automated Valuation Models (AVMs), which were first introduced to the UK in 2003.
AVMs have helped lenders and brokers to improve customers’ experiences by delivering a faster time to yes without comprising risk or autonomy.
Importantly, lenders are able to choose the level of risk they wish to take by determining when AVMs should be used and when a full physical valuation is required.
However, the development does not stop there – as the market continues to change, so does the mortgage valuation process.
The future now lies in finding the right mix of solutions that further improve the end-to-end process for customers.
One of the driving forces behind this change is the rise of an emerging hybrid semi-automated valuation solution known as desktop.
Desktop valuations are used in cases that fall short of the requirements for AVM usage, but do not warrant a local surveyor or full physical valuation.
These valuations are completed remotely by qualified surveyors using the plethora of data (including images, floorplans, and comparables) available on the property.
The turn-around time is usually within 24 hours.
However, desktop valuations are not new. They have been used extensively in Australia since 2012 and are already available to UK mortgage lenders – although their full use is yet to be deployed.
Over time, desktop valuations are likely to replace both mortgage applications sitting just outside the margins of a lender’s AVM policy and traditional partial physical valuations like curb-side inspections.
Change cannot be ignored
The increased use of desktop valuations in the market means greater automation for lenders and quicker mortgage applications decisions for consumers.
Crucially, the increase in automation will give surveyors greater flexibility and time to focus on the most complex cases.
Looking at Australia as an example, I believe the UK market could move to a 50/50 split between automated and physical valuations within the next two to three years.
One of our clients, a major UK lender, went live with our desktop solution in October.
During testing, a significant proportion of physical valuations were replaced by desktop, helping to increase the speed and efficiency of the valuation process.
Valuations are at the heart of the decision making process for lenders and brokers.
Early adopters of technology often have the greatest to gain as a result of driving innovation but change cannot be ignored and the mortgage approval process will always evolve to meet the expectations of the market.