The Intermediary – February 2025 - Flipbook - Page 67
T E C H N O L O GY
Opinion
Taking the pain
out of valuations
S
et against a backdrop
of the cost-of-living
crisis, many millions
of customers still to
experience rate shock,
a relatively flat housing
market, and increased regulation
and Government charters, growing
a successful lending business is only
possible with a continual focus on
detail, reviewing and improving
processes and policies.
Data released by the Financial
Conduct Authority (FCA) in December
suggests that a minimum of around
1.7 million mortgages have benefited
from one or more of the options
set out in the Charter, with around
149,000 mortgages temporarily
reducing monthly payments. This is
good news for customers, of course,
but it’s only possible through the
extraordinary efforts of lenders.
Delivering better
Winning new business also looks
set to be a challenge. The latest data
from UK Finance suggests that while
gross mortgage lending is expected
to grow slightly from £235bn in
2024 to £260bn in 2025, this is still
significantly below the £315bn market
we knew in 2022.
For lenders, the challenge isn’t
just about staying competitive; it’s
about finding ways to deliver a beer
experience to customers while keeping
costs under control and adapting to
broader societal goals – for example,
reducing environmental impact.
In this competitive environment
that is full of economic pressures,
improving operational efficiency is
vital. This is oen seen as an internal
exercise – a way to cut costs and
enhance productivity. However, if
done well, it can create significant
advantages for lenders and customers
alike, freeing up resources to focus
on service innovation and customer
service, enabling faster, more
confident decisions for customers.
Efficiency isn’t just about doing
things cheaper – it’s about doing
it smarter.
One area where efficiency and
customer experience intersect is
property valuations. The traditional
reliance on physical valuations,
or even desktop valuations, can be
slow and wasteful, especially given
the number of applications that are
declined where the valuation does not
meet the applicant’s expectations.
New alternatives
In these situations, a ‘slow no’ doesn’t
just cost money, it can also damage
a lender’s reputation. Lenders know
that delays and uncertainty in the
mortgage process reduce customer
conversion, but until recently,
alternatives have been limited to
automated valuation models (AVMs),
which are faster and cheaper, but
increase the lender’s risk, because they
don’t have any form of recourse.
By combining CLSQ’s advanced data
modelling with insurance-backed
property valuation decisions, VerifyQ
allows lenders to increase their instant
property valuation decisions. For
borrowers, this means faster lending
decisions and a smoother journey. For
lenders, it not only reduces costs and
risk, but also massively reduces waste,
because most of its cost is payable only
on completion, therefore in negative
margin, creating a win-win scenario.
This isn’t just about providing a
data-based assessment of property
value; it’s about providing confidence
– incorporating a range of data
sources and aligning with a lender’s
specific criteria, backed by AA-rated
insurance. This insurance covers
losses on outstanding loan amounts in
the event of repossession for up to five
years, giving lenders a safeguard that’s
unique in the market.
By reducing the need for physical
valuations, lenders can significantly
cut down on energy consumption and
carbon emissions.
SPENCER WYER
is strategic development
director at CLSQ
In this competitive
environment that is full
of economic pressures,
improving operational
efficiency is vital”
We estimate that each physical
valuation generates around 4.4kg
CO2e – a small but meaningful step
towards meeting environmental,
social, and governance (ESG) targets.
Sustainability isn’t just about optics;
it’s becoming a key part of how lenders
differentiate themselves and build
long-term trust with both customers
and investors.
Competing for customers
The path ahead for lenders is clear – to
succeed in a competitive market, they
must go beyond competing on price or
criteria. Customer experience, in the
form of faster decisions with certainty
when applying for a mortgage, will
be the defining factor, and efficiency
will be the result. There are solutions
that offer a way to deliver a beer
experience for brokers and borrowers
while managing risk and reducing
costs. Innovation can help lenders
achieve their commercial and strategic
goals without compromise.
As the mortgage market moves
forward into 2025, the challenge for
lenders isn’t just about keeping up;
it’s about finding ways to lead. By
adopting the right solutions, lenders
can position themselves ahead of the
competition – offering beer service,
greater confidence, and a genuine
commitment to sustainability. ●
February 2025 | The Intermediary
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