It’s difficult (and perhaps foolish) to ignore the growth of the bridging sector in recent times, with economic conditions and tightened mainstream lending criteria being the spurs to reignite interest in this alternative route to finance.
From a valuer perspective, bridging can create a number of challenges – with expectations around turnaround time higher than for ‘ordinary’ mortgage valuation inspections.
Often, the level of ‘bespoking’ that goes into each deal also means that brokers often seek a more detailed interaction with the valuer. Hopefully, this is to ensure that the surveyor fully appreciates the nuances of the deal and reports on the factors are most important in each case – however, valuers can be uncomfortable with requests that appear driven solely by the need to ‘make the figures fit’.
Valuers who are serious about working with the sector need to take these different legitimate needs into account and often higher than average fees are the reward in return. Equally, as it seeks to build credibility, the industry needs to understand that some of the current methodologies set alarm bells ringing with surveyors and mainstream lenders alike.
Currently, a number of valuation firms refuse to accept bridging instructions, presumably concerned regarding perceived higher risk. Some mainstream lender contacts have commented to me that aspects of bridging and valuer practice are too reminiscent of previous packager introduced business (where losses were relatively high) for them to be 100% comfortable. Lenders are typically seeking standardised reports of clarity provided by valuers who are demonstrably arm’s length from the transaction and any other party in the process.
The sector feels like it could be close to establishing itself as a long term alternative approach to the needs of some. But one of the steps to doing so will be to demonstrably implement best practice in respect of property valuations. The opportunity for both sides seem obvious – serious players should be picking the phone up to one another.
