It is the latest lender to make such a move as the second lockdown in England begins and as the second wave of the Covid-19 pandemic hits at the start of winter.
While valuers are still allowed to visit properties as part of the restrictions, it has been noted that times to agree appointments are extending and there is concern the number of visits blocked by isolating residents will increase.
LendInvest is making desktop valuations available for borrowers seeking residential bridging and auction products on loan sizes up to £250,000 with a maximum loan to value (LTV) of 65 per cent.
These valuations will be available for properties in England, Wales and Scotland up to a value of £1m.
It will be utilising desktop valuations through Connells to ascertain the security value, in absence of a valuer being able to make a physical visit to the property.
LendInvest director for bridging Justin Trowse said: “As we continue to operate through unpredictable times, it is imperative to be prepared for any sudden changes to the way we are able to work.
“While at this time physical valuations are permitted to go ahead, we realise we must be equipped for any eventuality should that change in the future.
“Adding the capability to utilise desktop valuations for more of our product suite allows us to stay one step ahead, and ensure we can deliver the finance our borrowers need with the same speed and flexibility we always have.”
Aspen provided a £422,000 loan at 75 per cent loan to value (LTV) on a multi-unit freehold block (MUFB) comprising of four studio flats in Wembley, London all with separate assured shorthold tenancy (AST) agreements.
The case was introduced by Raj Dahli, director at Auction Funding, an appointed representative of Connect Mortgages, and handled by Aspen’s senior underwriter Prabhat Talwar.
A fully costed illustration was issued in 15 minutes and a decision in principle was provided in one hour.
As the case was introduced on a Sunday, Aspen undertook a desktop valuation before someone was sent to visit the property the next day to collect data on the measurements and take photographs for the valuer.
Legals were handled by Leigh Haigh at Fieldfisher LLP and an offer was issued.
The bridge was completed on Aspen’s stepped rate product which has a rate of 0.49 per cent per month for the first half of the 10-month term.
Talwar said: “Bridging is all about speed, so when a broker and their client require an immediate solution to a financial matter it is our duty to deliver the resolution, no matter how short the timeframe.
“This is yet another example of our flexibility and willingness to get deals done.”
Dhali added: “We work together well with Aspen and when speed matters their proactive underwriters stepped up to the task and took this case from application on a Sunday to valuation on a Monday and completion on Wednesday.”
When the government gave surveyors the green light to resume physical valuations in May, it was said the halted transactions would take eight weeks to clear.
Remote capabilities
Although the return to physical valuations has allowed applications to progress especially within the high loan to value (LTV) space, the industry’s quick adjustment to remote alternatives helped to move things along even quicker.
Dominik Lipnicki, owner of Your Mortgage Decisions, said: “Without a doubt, the increased use of desktop valuations has also sped up the process and I am sure that they are here to stay.
“With more clients working from home, valuers would have also found it easier to book the appointments in.”
John Philips, national operations director at Just Mortgages, acknowledged that while high LTV applicants were not benefitting from desktop valuations, it was good that lenders were accommodating alternative ways of valuing a property where they may have not before.
Best of a bad situation
A wait of one to three weeks was reported by brokers, and while that is longer than the pre-Covid wait of five working days many were relieved that applications were progressing.
Howard Reuben, owner of HD Consultants, said: “Typical wait time we have seen now is about 14 days, but over the last few months, where no valuations were being booked at all, even a 14 day wait seems a bonus at this time.”
Lipnicki added: “Many in the industry expected the valuation backlog to be significant and take months to get back to normal.
“I think that this view was overly pessimistic as most of the backlog is now gone and we are seeing valuations being booked a week or two away, which is close to pre-lockdown timescales.”
Other factors causing delays
As the reaction to the pandemic was so varied, Reuben said some of the initial backlog was actually a result of protective measures made by lenders.
“Most lenders proactively worked closely with their surveyor colleagues and implemented discretion and policy changes and others were led by them, and their own restrictive structures, which created a huge backlog,” he added.
Heightened caution towards health risks posed by the virus was also named as a factor for the longer waits with new valuation instructions, now that the backlog had been cleared.
Philips pointed out there was still a limited number of qualified valuers carrying out checks and they were having to do their job under different and more difficult conditions.
“The safety of all concerned is still the foremost consideration.
“Our experience is that valuations may still be taking a bit longer than normal, and it’s important to factor this in,” he said.
Akhil Mair, managing director of Our Mortgage Broker said he was seeing wait times of up to three weeks due to surveyors taking extra precautions and requesting letters be completed before an inspection takes place.
Valuers understandably want everyone involved in the process to adhere to Covid-19 requirements, Reuben added, and he said if there was any sign of a risk, there was an immediate delay of up to 14 days before another appointment would be arranged.
He said: “Either way, fundamentally it’s about communication with our clients and as long as they are told up front about the time frames, and kept up to date during the process, then the case is managed and all parties can move forward accordingly.”
The lender said the expansion of its valuation options will suit cases where speed is a priority and can help to make a loan more affordable, as remote valuations are cheaper than physical surveys.
Hope Capital said by taking this decision it is future-proofing itself against similar scenarios whereby valuers are unable to enter properties or there is huge demand on valuers.
These new options for valuations are part of the new Hope Capital Custom Collection which comprises six different products, features and options.
Gary Bailey (pictured), managing director of Hope Capital, said: “It’s fantastic that we’re now able to accept a far broader range of valuation types.
“Often a full valuation can take considerably more time than we may have. Particularly given current circumstances it’s now more important than ever that we’re flexible and can operate swiftly.”
The lender is introducing automated valuation models (AVMs), desktop valuations and offering joint legal representation.
AVMs will be offered at up to 50 per cent loan to value (LTV) on houses up to £1m in Greater London and £500,000 outside the capital.
Flats can be considered up to £600,000 in Greater London and £250,000 in the rest of the country.
Where the LTV is over 50 per cent, Arbuthnot said it will use desktop valuations.
The lender said it was also looking to improve the efficiency of transactions for clients by offering joint legal representation where one lawyer can act on behalf of the lender and borrower.
Yasin Patel, joint managing director, said: “Introducing AVM and desktop valuations demonstrates how we’re investing in the right technology to deliver for our clients.
“It also allows us to prioritise the safety of our colleagues, brokers and clients as we start to consider how we’ll operate in a world of social distancing.”
Patel added: “Dealing with property finance facility agreements is a specialist legal discipline.
“Joint representation makes the negotiation, documentation and drawdown process simpler and can save the client both time and money.”
Just Group
Just’s surveyor partners will conduct physical inspections in properties where the residents are not self-isolating or showing symptoms and where social distancing guidance can be upheld.
Where social distancing is not possible, the resident can agree to wait outside while the inspection takes place.
Surveyors will be provided with personal protection equipment (PPE) and an assessment will be carried out with the customer beforehand to establish inspection procedures.
More 2 Life
More 2 Life will resume physical valuations with E.surv while continuing to run desktop valuations where necessary.
The lender said it will conduct in-person inspections with respect to government guidelines on working in people’s homes.
Dave Harris, chief executive at More 2 Life, said: “With the later life lending market facing significant challenges, More 2 Life is working hard to be as flexible as possible with regards to valuations – an area that we know from our own research is a real cause for concern for advisers.
“More 2 Life’s dual track process will ensure homeowners can move rapidly through the application process to a loan offer via our advanced remote valuation process, with physical valuations available where necessary. It is all about helping advisers help their clients and keeping the market moving at a time of huge uncertainty.”
The bank told Mortgage Solutions by using a combination of automated valuation models (AVM) and desktop valuations it has been able to take the majority of applications, that had not been valued in person before the restrictions came into force, through to mortgage offer.
Due to the limits placed on physical valuations to tackle the spread of Covid 19, on 25 March Santander halted in-person surveys. Two days later it, like many other lenders, Santander restricted its lending. The bank would only accept new mortgage applications for residential purchases and remortgages up to a maximum loan to value of 75 per cent.
But during that time, the bank says it was able to move close to three quarters of the applications it received through to offer without the need for a surveyor to visit a property in person.
Santander increased its LTV back up to 85 per cent LTV on Monday, marking the beginning of a week of good news for mortgage brokers, as the government gave the housing market the green light to reopen.
Physical valuations, house viewings and show home visits can all resume carried out under social distancing measures and construction sites, new build sales offices and estate agencies were allowed to reopen.
But Santander does not plan to ditch its policy of relying more on remote valuations than it has done in the past. The bank said it expects the AVM success on remortgages to be the same between 75 to 85 per cent LTV as on the lower LTV brackets.
However, the bank has already begun contacting mortgage brokers to let them know it is now booking in physical valuations for the applications it has been unable to progress.
Banks have already begun writing to brokers to tell them valuations are being booked in for mortgage applications that had stalled due to the government’s lockdown restrictions.
But mortgage experts warned it could take some time to get up to date with the pipeline of applications that require a survey.
Kevin Roberts, director, Legal & General Mortgage Club, said: “From my conversations with lenders and surveyors across the industry, we estimate that there are around 60,000 to 65,000 valuations which have been put on hold due to the Covid-19 crisis and the lockdown.
“This will be an immediate hurdle for the industry to overcome, but it’s clear that lenders and surveyors are already working together closely to address this backlog.
“Advisers will have an important role to play as the lockdown is eased, keeping their clients informed but also managing the expectations of borrowers – particularly as reopening the housing market won’t be like the flick of a light switch. However, the indication from the industry is that this backlog could take just a few weeks to be addressed.”
Metropolis Surveyors’ commercial director Chris Bramham, however, said it could take up to two months to get back to serviceable levels of survey requests.
A spokeswoman for Connells group said: “Following latest Government advice, from Monday 18 May Connells Survey & Valuation will return to carrying out physical valuations in England.
“Valuations will only take place when property inspections can be conducted safely for both valuer and customer and in a ‘Covid-19 secure’ manner.”
E.surv said its plans were still being finalised but it was “becoming more of a possibility”.
Richard Sexton, director, business development, e.surv, said: “The driving factors are still the government guidance and RICS Best practice. The industry has obtained much greater clarity in both these areas after some initial mixed messages in the last 48 hours.
“We believe we have a clear road map back to undertaking inspections, provided our own risk assessment indicates this can be done safely for all parties and of course the occupant is willing to allow the process to go ahead. In reality, we are entering a hybrid period where physical and remote valuations will need to continue side by side for some time.”
Yesterday, the government issued guidance for workers who must enter people’s homes, including surveyors, on how to work safely during the coronavirus pandemic. Within hours of the guidelines being made public, banks began booking in physical valuations for stalled applications.
Tens of thousands of valuations are thought to be have been put on hold, and surveyors predict it could take up to two months to clear the backlog.
Meanwhile, housing secretary Robert Jenrick announced that people in England were allowed to begin viewing properties and moving home, as the property market begins to reopen after being in lockdown for almost eight weeks.
Estate agent offices and show homes can reopen from today with social distancing measures in place.
Brokers say the news will allow them to progress urgent high loan to value (LTV) remortgages and purchases and cases where properties are worth in the region of £1m.
But they are concerned about how property valuations will be affected.
Positive first step
Lea Karasavvas, managing director of Prolific Mortgage Finance, received an email from HSBC just hours after the government’s guidance was published telling him they were ready to book in a physical valuation for one of his clients.
He said: “This is a great positive step in the first road to recovery and will certainly help those that were forced to hit the pause button midway through a transaction before the lockdown.
“What will be key are the valuation figures that are reported back. With many mixed views on where values will sit post lockdown, we will be waiting with bated breath to see what valuers will do.
“There has been much talk of down valuations ranging between three and 15 per cent but from what we have seen most renegotiations have faltered with vendors holding their nerve and refusing to budge on prices.”
High value properties
Managing director Richard Campo of Rose Capital Partners said his business had been disproportionately hit because most of his clients own or are buying homes worth at least £1m.
At this value he says most of his cases were excluded from lenders’ automated valuation models (AVM) or desktop valuation policies and were stuck waiting for physical valuations.
Campo says though for the majority of borrowers, AVMs and desktop surveys would be sufficient which is a recent development among banks which the public were not aware of.
He thinks the speed at which lenders have embraced technology to carry out remote valuations raises questions for the future of traditional surveying.
“While surveyors may be back out on the road shortly, lenders have proved that they really don’t need them as much as they thought,” he said. “It will be interesting to see how this shakes out in the long term.
“I suspect we’ll see a lot fewer physical valuations happen from now on with the exception of high value, unique or non-standard properties.
“Personally I think that is good thing as it cuts costs and speeds up the process for clients. It is also another value add for brokers because we can help our clients navigate this part of the process.”
No common sense
Simon Redler, director of Prudell Financial Services, found himself in a similar position and thinks the rules around physical valuations and high value properties lacks common sense.
“Our business has welcomed the news that the government has been quick to issue guidance on this situation,” he said.
“We have many cases that are unable to proceed because the property value is in excess of £1m which means that irrespective of the loan to value a physical valuation is required.
“This is due to surveyor’s professional indemnity requirements which seems a bit odd as a mortgage for £200,000 based on a £1,200,000 valuation cannot proceed whereas a mortgage of £200,000 based on a £350,000 valuation is fine.”
Redler said many urgent remortgage cases that were on hold because of the need for a physical valuation have resulted in clients reluctantly staying with their lender to avoid moving on to an expensive standard variable rate in the meantime.
David Hollingworth, associate director, communications at L&C, added: “The safety of valuers and homeowners will be paramount of course but this guidance will be warmly welcomed.
“Lenders have acted quickly to develop their automated and remote valuation capability and that will continue to play a crucial part in allowing a smooth flow of reasonable volume.”
HSBC has made changes to its mortgage range, reducing the interest rate across a number of fixed rate mortgages and reintroducing its two-year tracker deals.
The two-year tracker ranges from 1.39 per cent at 60 per cent LTV to 2.09 per cent at 90 per cent LTV, and all have no early repayment charges.
The bank is reducing rates on 10 mortgages across 60 per cent to 75 per cent LTV.
Changes include its two-year fixed product at 60 per cent LTV with a £999 fee which has been cut by 0.05 per cent to 1.24 per cent. The fee-free equivalent is also reduced by 0.05 per cent to 1.54 per cent.
HSBC’s five-year fixed mortgage at 60 per cent LTV with a £999 fee, has been reduced by 0.05 per cent to 1.44 per cent and the fee saver equivalent reduced to 1.69 per cent.
The bank will process new applications with a desktop or automated valuation.
HSBC said it also continues to add broker partners to the list of those who can access its products and it is now up to 181 firms, covering 13,500 brokers.
Michelle Andrews, HSBC UK head of buying a home, said: “The unique set of circumstances brought about by recent events has led to some significant change set alongside some important constants.
“One constant is to ensure we review our rates regularly and adjust them for our customers keeping them as competitive as possible.”
The Melton brings back high LTVs
The Melton Mowbray Building Society has relaunched its mortgage products up to 90 per cent LTV as of 17 April.
The society has also introduced a new desktop valuation service which will be available on this range, provided it meets the relevant criteria. It will also be available on all products in the Melton’s credit repair subsidiary MBS Lending.
New-build properties are exempt from the valuation service.
The society cut its lending on new applications to 60 per cent LTV at the beginning of April citing the restrictions on valuations as the reason.
Dan Atkinson, head of sales and marketing at the Melton, said: “The situation around coronavirus continues to change and we are adjusting to the ‘new normal’ way of life.
“We are committed to ensuring that we can continue to service our brokers and our customers and we have therefore adapted our proposition to allow for desktop valuations to be completed on the majority of our products.”
“This solution will enable us to continue processing applications with a streamlined approach, considering the all important safety of our customers,” he added.
