Simon Read, head of business development for Victoria Mortgages, said AVMs did not take into account structural faults with a property and any problems discovered after purchase would fall on the client. He added AVMs fed on the fear of the broker losing their client if the deal was not completed quickly and the client was shopping around.
Read said: “The broker and the client want to know if the property has structural issues like subsidence. There’s only a minority of cases, such as auction sites, that need a valuation right away and I think 90 per cent of clients would wait for a survey.”
While Read said he agreed with making the house buying process faster, caution was required with AVMs and they must be sold to the client properly.
Alex Murray, group director of mortgages at the Thinc Group, agreed AVMs had done more for lenders than for the customer. “In certain circumstances AVMs are beneficial with small loans. But I don’t think AVMs are the panacea some lenders are making them out to be. There’s also the issue of how to justify the cost, as it’s the same as a full survey. It’ll be interesting to see if they move to a two-tier fee system.”
David Finlay, intermediary business director for Barclays, said: “Remortgage is the arena where AVMs will have the strongest play.
Consideration should be given to using AVMs speeding up the decision, but it should be backed up by a valuation service. Reducing the cost of AVMs makes commercial sense and there is a distinct possibility charges will change.”
