Bridging could face ‘valuation cliff’

Nia Williams

March 11, 2013

Richard Sexton, director of business development at e.surv, warned bridgers that they must address their PR image or face being potentially blackballed by some valuation firms.

Sexton said: “Bridging firms have something of a PR issue amongst the valuer community.

“For reasons that are understood, the timescales involved are faster than those usually worked to by valuers and there is usually additional admin as a single inspection may require multiple report retypes.”

But Sexton said “anecdotal stories of attempts to influence valuer figures in some cases” is of more concern.

“Like any industry there will be poor and excellent practitioners and valuers will be selective,” he said.

“If bridging isn’t to miss out on accessing the shrinking surveyor resource it needs to address these perceptions and engage in open dialogue to get the right service specification first time.”

However prominent members of the industry have been quick to point out that valuers are not alone in experiencing PR issues.

Mel Fordham, chief executive at Centrado, said: “I think you could turn that on its head.

“In the past 6 months we’ve had specific instances of valuers going out and delivering a report of null and void out of what I can only conclude as apparent self interest.

“We’ve had some absolutely obscure, ridiculous comments turned into a non-mortgageable property.

“I just wonder if they sit around a table and say we have to protect our professional indemnity.”

The disharmony between the two industries could be further exacerbated as valuers struggle to deal with an increase in demand following an upturn in the mainstream mortgage market.

Recent projections from e.surv revealed that the industry will be operating at 91% utilisation in 2013, up from 72% in 2012.

e.surv also estimates the full time equivalent number of active valuers has fallen from 7,000 in 2007 to less than 2,000 in today.

Fears that an uplift in lending or a substantial fall in capacity could push demand over capacity has led to speculation that some valuers could increase their fees for bridging cases or withdraw from the market altogether.

Commenting on the figures, Julian Ingall, director at Coreco Specialist Finance, said: “Whilst in principal we agree that the surveying resource is shrinking we believe that surveyors have just moved into different fields.”

But Ingall was keen to point out that as a niche industry bridging is not necessarily competing with the mainstream mortgage market for surveyors.

Ingall said: “As a niche industry bridging needs niche surveyors.

“Bridging has a higher risk aspect and that does not fit in with big surveyors’ process orientated systems.

“Mainstream valuers just haven’t had the exposure to the type of property we deal with.”

Benson Hersch, chairman of the Association of Short Term Lenders, agreed: “The major bridgers have long-term relationships and I can’t see them suddenly dumping their customers.

“Our members have good relationships with surveyors and I don’t see that changing at all. The smaller firms are still hungry for business.”

But Hersch wouldn’t rule out the possibility of a lack of valuers affecting the market in the future.

Hersch said: “I’m not saying that it may not emerge as a problem but it is not one that has been brought to my attention yet.”

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