The firm cautioned that while limiting costs may appear to be a commercially sensible move, it can be potentially very damaging for lenders later down the loan journey.
It noted a recent case where a lender had sought damages from a valuer retained at short notice to provide a “limited bricks and mortar valuation”.
After a number of significant structural issues were later discovered, the lender tried to seek damages, even though it had not asked for a detailed structural report, and is now in the position of trying to claim indemnity for its losses.
Jonathan Newman (pictured), senior partner at Brightstone, warned that many new lenders either do not have the experience, or have forgotten the lessons, of the last recession, and are overly fixated on price.
He continued: “In today’s market, these considerations should not outweigh a requirement for the right professional resource, to deliver the right professional job, comprehensively and thoroughly.
“I hear much about lenders and this risk curve – but those discussions centre on riskier lending, not on watered down, professional relationships.”
Newman noted that established lenders are more likely to recognise that these issues can damage their reputation and proposition, stating: “Those that understand, have shown themselves to be proactive in their relationships, regularly seeking engagement to ensure that existing fee arrangements and service models are up-to-date and fit for purpose and accurately reflect the services needed today.”