Speedy Mortgage?


Dragging over from last year into the spring and early summer there has been a considerable problem for buyers in obtaining timely mortgage valuations. In a recent mystery shopping exercise, carried out by Mortgage Strategy magazine, three of the biggest surveying companies – Colleys, E.Surv and Connells were contacted for a HomeBuyer report and separately for a valuation for a property in London SW15, with a mortgage from Halifax. Connells and e.surv were not accepting new instructions and Colleys had a waiting time of over a month.

Residential property sales have recently been at their highest volumes for over three years and, whilst the market is undoubtedly drawing some breath over the holiday period, this problem will inevitably arise again with some sales derailed as vendors lose patience with purchasers who take a long time to have their mortgage approved because of a delay in the valuation.

According to the larger surveying companies and lenders, surveyors have left the profession in their droves and there are just not enough people to do the work. There are various unsubstantiated figures bandied around as to how many have left but although some surveyors have sought pastures new, almost everyone we know who was a surveyor last year or the year before is still a surveyor (and we know plenty of them).

One of the main reasons for past delays has been that (regardless of substantial valuation fees charged by lenders) the fees being offered to surveyors to conduct valuations for mortgage purposes are so low that most can make a better living doing other work. Fierce competition amongst “major national” firms bidding for “panel management” positions (the right to allocate work to surveyors and retain part of the fee for doing so) has cut the fees to local surveying firms to whom much of the actual work has traditionally been allocated.

Unfortunately, rocketing professional indemnity insurance has left many valuers with no alternative but to withdraw from mortgage valuation work. Premiums for many mortgage valuers have doubled over the last year.

Since April, lenders and the mortgage industry as a whole have been grappling with tighter rules and regulations introduced following the Mortgage Market Review (MMR) which was a comprehensive review of the mortgage market, instigated by government following the lending excesses of the past and which started with a Discussion Paper in 2009 and culminated with tighter rules, many of which came into force on 26th April this year.

Ironically, mortgage valuation delays have decreased but delays for buyers have continued because processing of mortgage valuations has taken longer as the tighter rules bite hard.

At Capital Chartered Surveyors, our advice to buyers is to keep the mortgage application as simple as possible. Remember that a mortgage valuation is prepared for the lenders benefit, not yours. You should obtain your own advice to rely on, but don’t introduce the potential for further problems by instructing the mortgage valuer to conduct your Building Survey or RICS HomeBuyer Report. Obtain your own advice from an independent Chartered Surveyor not linked to the mortgage process.

Roger Mullin