The introduction of social distancing measures presented a unique challenge to activity in the property market.
Valuers and lenders have worked hard to support the market through this period.
When social distancing guidance and Royal Institution for Chartered Surveyors (RICS) protocols rendered physical property inspections untenable, technological solutions were leveraged to maintain accurate, evidence-based valuations.
Several valuation and surveying firms had already developed their own desktop valuation solutions. By working closely with lenders to agree upon revised risk criteria, these firms were able to support the market by applying this technological solution to the widest possible proportion of the property mortgage types and applications that could be assessed safely and accurately.
These sophisticated desktop solutions more than bridge the gap between Automated Valuation Models (AVMs) and valuations derived via physical inspection.
Through the strictest periods of lockdown, when all non-essential travel was prohibited, this alternative way of working meant some valuation firms could continue to support mortgage lenders, while prioritising the safety and wellbeing of employees, customers and the wider public.
New reality
As lockdown regulations eased further, valuation providers implemented a gradual return to physical property inspections, with a range of safety measures in place before and during the inspection.
In accordance with government regulation and guidance from RICS, surveyors must still observe social distancing guidelines, adopt personal protective equipment (PPE) and follow a number of new protocols.
While Covid-19 has transformed the way we all live and work, data shows that contingency and safety measures have minimised the impact on property valuations.
Furthermore, and contrary to speculation based on isolated cases, data from E.surv’s property valuations show that the market remains robust.
Re-pricing
In London for instance, Q2 2020, saw a modest two per cent increase in the number of applications submitted with overestimates of value, suggesting that sentiment places the market slightly ahead of where it really is.
Additionally, there is noticeable offshore interest in the UK capital and it’s been well-documented that recent events in Hong Kong may stimulate interest from this area in the coming months.
Looking at the UK as a whole, a similar story can be seen.
London’s figure actually compares favourably to the average for the rest of England and Wales which saw an increase of four per cent in the number of applications submitted with overestimates of value.
That the industry has been innovative and agile enough to overcome the challenges so far, with minimal disruption, is testament to the rigour and sophistication of the mortgage market and the hard work of lenders and valuation firms.
While we have yet to emerge fully from the crisis, the market has exhibited a heartening level of maturity and resilience and there has been a stimulus for innovation that will ultimately benefit all stakeholders.
