Severe homebuying delays if market picks up
Experts fear that if the market reaches one million housing transactions per year, as predicted by the Ernst & Young Item Club, it could take up to three months longer for a surveyor to visit a property following an instruction.
Karl Knipe, director of Metropolis Surveyors LLP, said: “This is a huge problem which needs to be addressed with urgency by the whole market.
“If the market reaches the one million mark, with the amount of surveyors in the industry at the moment, the market will simply not cope and will result in the reputation of surveyors being raked over the coals again.
“A back log of applications will build up which could see the time it takes to get a property valued extended to three months. This is the elephant in the room that everyone is side-stepping but the problem will not go away by simply ignoring it.”
Traditionally the time it takes to complete a purchase is 12 weeks but Mark Hayward, managing director of the National Association of Estate Agents, said there is an expectation this could be extended by a further four to eight weeks due to the delays in processing mortgage applications.
He said: “The longer the process goes on the more likely it is that the chain will collapse. This piles extra pressure on my members because of the added stress on the transaction if there are delays.”
Hayward warned that if surveyors are not able to meet the strict turnaround times imposed on them by lenders, typically 72 hours, then lenders may resort to using more desktop valuations and historic surveys.
Knipe said the average age of a surveyor is 57 and with no new blood coming into the profession there is no immediate solution in sight.
He said: “There is no money being invested back into the surveying industry because the big players, e.surv, Legal & General Surveying Services, Countrywide and Connells have driven down the cost of valuations.”
But Richard Sexton, business development director for e.surv, refutes the claim that the low price paid for valuations is down to panel managers.
He said: “e.surv has never sought to reduce fees this would be counterproductive. What has occurred in recent years is that due to supply and demand dynamics lenders have driven down the costs as a condition of contract renewal and valuers have had to make a choice as to whether to accept fees or walk away from the particular relationships.
“We have done this in some cases. It’s possible that some other firms, who were facing more challenging conditions, have been prepared to work at a lower fee rate and that would be a decision for them.”
Sexton said the market is now at a turning point with demand now outstripping supply.
He added: “Inevitably if the normal rules of economics apply we will now see a rise in fees in response to this.”
But not everyone shares the view that the increase in property transactions will have a crippling effect on the surveying industry.
Alan Cleary, managaing director of Precise, said while he thinks an increase in transactions will cause a problem in the short term, in the long term the profession will see the return of dormant surveyors.
He said: “I agree that there may be a difficulty initially in coping with demand but there are qualified surveyors out there who will return if there is the work.
“It is the same in any industry, companies don’t recruit ahead of demand so for a few months while the recruitment process is going ahead existing surveyors may be stretched but it will be short lived.”