Specialist lenders working with capital markets to accept remote valuations

  • 27/10/2020
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Specialist lenders working with capital markets to accept remote valuations
Non-bank lenders are working with capital markets to potentially accept remote valuations in some situations, Fleet Mortgage and Keystone Property Finance have revealed.


However, although the lenders noted progress has been made, there is unlikely to be any change in policy during the current coronavirus wave.

While all mortgage lenders were affected by the cessation of in-person valuations during the first lockdown earlier this year, those who are solely funded through capital markets and funding lines were particularly badly hit.

They were unable to introduce remote solutions or automated valuation models that banks and building societies were able to use to take some of the strain off their caseloads.


‘Little appetite for change’

Speaking on the latest Brightstar video debate, Fleet Mortgages distribution director Steve Cox said: “For those of us that rely on capital markets and funding lines the honest and brutal answer is there is currently no alternative to physical valuations.

“That isn’t likely to change fast. It’s not a Fleet thing or a Keystone thing, it’s not even funders objecting to it.

“It is other people in the chain of securitisation that just won’t accept anything other than a physical valuation.”

Keystone Property Finance CEO David Whittaker explained the reason for this was a result of interventions following the credit crunch put in place in the USA, and while there was hope, it was still some way off.

“There’s little appetite currently from the capital markets to change that,” he said.

“We all did a lot of work during the first phase of lockdown to change the capital market’s view and that’s an ongoing project because we see it will come round again in different forms, so not automated valuation models (AVMs) but remote valuations.

“Tony Ward chairman at Landbay did a lot of good work on it and it’s a project we’re all working on, but we haven’t been able to land it in time for this round two.

“But you’ve got to expect there will be variations of this virus going forward and therefore having a remote valuation solution maybe possible but not in time to help us out in this current cycle.”

Cox added that it any alternative to physical valuations was more likely to come in for the remortgage market, when it was less important to the client to have an in-person viewing.


Limits on specialist lending

OneSavings Bank sales director Adrian Moloney also joined the panel, hosted by Brightstar CEO Rob Jupp.

Moloney noted that while such a move would be important for non-bank lenders, there were still many situations where on physical valuations could work.

“In the specialist market there are still great limitations on what a desktop valuation can give you,” Moloney said.

“In the markets we all play in there’s freehold blocks, there’s houses in multiple occupation (HMOs), there’s certain new builds that desktops can’t pick up.”

He noted some banks may start using the technology, but it was unlikely to be suitable for vast numbers of cases.

“It would be a very different prospect in terms of getting desktops switched on in the specialist market now with the volumes of people who want to purchase or refinance properties,” he said.

“I think valuers are doing a really good job keeping us informed.

“We’ve got to keep really patient with them, it’s taking about five or six days to get appointment booked in with clients so a survey takes a bit longer but it’s for brokers to help manage clients and us to be transparent about turnaround times,” he concluded.



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