During the summer of 2013, a shortage of surveyor support elongated processing times for a mortgage application in the UK. Market wide concern has again appeared this month, as reports suggest that large surveying firms are already quoting extended timescales for a valuation appointment to be completed, potentially preventing a quick purchase process for any contractor looking to move home.
In July last year, national surveying firms such as Colleys and e.surv, two of the largest and most widely used in the market, began to quote 5 week delays for a survey appointment to be completed from the point of instruction. The summer months are the most consistently busy and profitable time of year for the home buying sector, and it was estimated that these delays cost the market a significant sum in profits. Many in the market believe that a similar disruption this year would see the Council of Mortgage Lenders miss their predicted annual target for £195bn to be made from lending for home purchases.
The Royal Institution of Chartered Surveyors, the body responsible for administering accreditation for surveyors in the UK, stated in 2013 that 9000 qualified professionals were currently working in the industry. It is not known how many surveyors were active before the financial crisis caused a wave of redundancies and closures, but the suggestion is that the figure was far higher. Added to this is the fact that lenders chose to reduce the amount paid to firms per instruction, which made it financially less viable for many firms to train new staff to fill the gaps.
Particular issues with surveying timescales were rife across London last year, and with the capital being a likely area for contractors to purchase, it is concerning to note that problems are again appearing in this area. E.surv and Connells have been quoted as no longer taking on instructions in the SW15 area, while Countrywide Surveying Services estimate a waiting time of up to two weeks for even the most basic valuation to be completed.
From Contractor Mortgages Made Easy, senior consultant Mark McBurney said that it will be important that the message that delays will occur needs to passed on to all professionals within the market. He noted, ‘The majority of pressure in the home buying sector comes from the estate agency sector, and the realisation that the market will not continue to move at the same speed month on month needs to be considered, with the change in seasons bringing new challenges.
‘While valuation issues pose one delay for mortgage processing, the introduction of the Financial Conduct Authority’s Mortgage Market Review is also being quoted by many lenders as causing further disruption. The two elements coupled could mean that from application submission to mortgage offer, timescales could now be edging closer to 5-6 weeks before a lender can provide complete confirmation of a loan being offered.’
The director of e.surv, Richard Sexton commented on the validity of the CML target for lending this year: ‘I think the target is still achievable but we may have some variation across the market. Some lenders may miss their own targets if they haven’t got their valuation supply assured.’
He continued to say that, ‘If you are a lender with the right contacts in place and have your capacity locked with the bigger valuers, you should be insulated. However, those lenders who have not yet got all of their valuation supply set up, they could certainly be facing longer delays and a difficult time hitting their targets.’
Article By: Simon Butler, Senior Mortgage Consultant at Contractor Mortgages Made Easy
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