Following the introduction of AVM systems by GMAC-RFC, edeus and Kensington, Julia Harris, mortgage analyst at moneyfacts
.co.uk queried the use of the systems. She said: “The obvious advantage of an AVM to the consumer is that it is quick and does not require a site visit, which can sometimes be inconvenient. However, it must be remembered, this type of valuation is for the benefit of the lender –providing an indicative valuation to ensure a property is suitable to mortgage and priced in line with the current market value. It provides no reference to the condition or state of repair of the property or the possible variations between the individual properties within that postal code.”
She added that consumers could suffer as a result of not fully understanding the service they will be potentially paying for.
A broker, who wished to remain anonymous, added: “When buying in a chain you only complete your purchase at the speed of the slowest buyer in the chain, so a faster survey doesn’t necessarily speed up a purchase unless all in the chain are using AVMs. AVMs could also be abused by poor quality brokers who are aware the properties may have structural problems.”
However Alex Hammond, PR manager at Kensington, argued that AVMs helped consumers. He said: “AVMs can provide real benefit to consumers who require the certainty of a quick offer to help them secure a property or to aid them when they are shopping around for the best deal. With an AVM, which can be carried out in minutes, a lender can make a decision whether or not to lend on the property without having to wait for a surveyor to carry out a physical inspection. This means the lender may be able to make an offer more quickly, and the consumer can therefore benefit from the certainty of an offer over a decision-in-principle.”
