Replying to a recent question in the House of Commons, Yvette Cooper said: “We would expect most people to see cuts in the cost of valuations as a result of the Home Condition Report, as well as swifter mortgage offers where you don’t have to wait for a survey.” However, West Brom for Intermediaries has challenged the claim that lenders will not require a survey.
Paul Marland, assistant general manager, Intermediary Sales, said: “Most lenders will require a proper survey to be undertaken in the vast majority of cases. Automated valuation models are currently only used for a relatively small proportion of applications with low loan to value (LTVs) and lenders will not rely on home condition reports for underwriting purposes.”
A recently published report by the Council for Mortgage Lenders (CML) confirms that HIPs will not remove the necessity for a physical valuation of a property to be undertaken in the majority of cases. The report also confirms that although the use of automated valuation models will become more widespread, only 40 per cent of valuations will be completed using automated valuations (AVMs) in five years time. The same survey revealed that less than a fifth of lenders believe HIPs will bring substantial consumer benefits.
Marland concluded: “Ministers such as Yvette Cooper clearly have little understanding of the lending process and the way in which mortgage providers go about assessing risk. It is concerning that someone in such a pivotal position as far as the role out of HIPs is concerned, has fundamentally misunderstood what is actually going on.”
