The housing market could be back up and running in just a few weeks after the industry body for surveyors confirmed it will unveil ‘practical guidance’ to enable home valuations to restart safely.
A spokeswoman for the Royal Institute of Chartered Surveyors told This is Money that it is readying a new set of guidelines for valuers across the UK and hopes to release them imminently.
The effective suspension of valuations in March slammed the brakes on mortgage offers and the property market, with surveyors unable to access homes due to lockdown and social distancing.
The property industry sees restarting valuations as the key to unlocking the housing market, although government advice not to move home remains in place.
Property valuations were effectively suspended in March when social distancing rules and lockdown came into force, leaving many lenders unwilling to offer mortgages
Combined with uncertainty about the effect of the coronavirus lockdown on house prices – and the need to cope with a wave of borrowers asking for mortgage holidays – the suspension of valuations triggered banks and building societies to pull hundreds of mortgage deals overnight.
The RICS spokeswoman said: ‘The built environment, whether that is residential, commercial or construction, will play a significant role in rebooting the UK economy. But the health and safety of all who interact with it is RICS’ top priority.
‘Since lockdown began we have pushed Government for clear and transparent guidance to keep key sectors working.
‘In the coming weeks, RICS will issue practical guidance to help professionals to re-open buildings and ensure safe home moving.’
Many banks and building societies suspended new mortgage lending on both residential and buy-to-let property above 60 per cent loan-to-value as Britain went into lockdown.
While the situation has now eased, with most lenders now offering mortgages to those with at least a 25 per cent deposit or equity, things remain tight for those with small deposits.
Banks and building societies are often happy to carry out some desktop valuations, which draw on local property market data and previous sales to check if they are willing to lend, but many properties and borrowers do not fit the bill for these.
The inability of valuers to carry out physical property inspections has also barred lenders that do not use automated valuation models from offering loans.
Andrew Montlake, of mortgage broker Coreco, said that the key to getting the property market moving, was ‘first of all getting valuers back to deal with the backlog of applications’.
He said: ‘There doesn’t seem to be much reason why this can’t be done simply and safely by making sure, for example, the valuer is the only person in the house when they come round or utilising technology, or even enabling the borrower to do a video inspection of the inside whilst the valuer looks outside.’
RICS: ‘For this all to work, and to give firms the confidence they need, Government must provide more clarity to ensure no one’s health is put in jeopardy.’
RICS stressed that while it hoped its new guidance would enable safe property inspections to recommence imminently, all firms should continue to follow government advice.
The spokeswoman added: ‘For this all to work, and to give firms the confidence they need, government must provide more clarity to ensure no one’s health is put in jeopardy.’
While a return to physical valuations should kickstart people being able to buy and sell property again, barriers will still remain to moving home. The Government has told people not to move unless it is into properties that are empty and many removal firms are not working.
Banks are also likely to remain cautious on high loan-to-value mortgages to protect themselves in the event that house prices fall significantly in the aftermath of lockdown.
However, it could be particularly beneficial for landlords seeking to purchase or remortgage more complex properties.
Angus Stewart, chief executive of buy-to-let specialist broker, said: ‘The lack of physical valuations is still presenting a problem in sectors such as HMOs – houses of multiple occupation – and multi-unit blocks.
‘These properties are more likely to need a physical valuation to check, for example, that they are compliant with the various regulations.’
Stewart added that the issues around physical valuation have also been affecting higher value properties.
‘Some lenders are reluctant to lend against properties above £500,000 without a physical valuation so buyers looking for larger loans will need help tracking one down,’ he added.
Simon Jackson, managing director at SDL Surveying, believes there will be a ‘staggered change to work practices post-lockdown with estate agents and surveyors being able to work in a more normalised way’.
It is likely that visits will be conducted under strict hygiene requirements
He said: ‘We will still be respecting social distancing and working within certain guidelines in relation to valuers’ own health and that of the resident.
‘By doing this, we think we’ll be able to start inspecting properties and conducting physical valuations.’
Jackson is already working from a premise that physical valuations will be back up and running soon.
He added: ‘To be clear, no surveyor should attempt to do this if they have a high temperature, a new persistent cough, have been instructed by a health professional or the best advice to self-isolate, are a member of a vulnerable group, or are living with someone who is self-isolating or in a vulnerable group.
‘If surveyors are able to inspect, the booking process will ensure we gain the owner’s agreement to the inspection being carried out on condition, and that no more than one person will inspect the property.’
It is likely that visits will be conducted under strict hygiene requirements, including the ventilation of the property with doors and loft hatches being left open, Jackson added.
Where the property is inhabited, strict guidelines would also prevent a physical inspection under certain circumstances including if anyone in the household is:
- symptomatic or have had symptoms in the past 48 hours
- under a compulsory isolation order or awaiting results of testing for Covid-19
- considered medically vulnerable
- present in the house during any necessary visit
Jackson said: ‘We are also going to issue all our surveyors with appropriate personal protective equipment in order to carry out their inspections, which will consist of masks, gloves, hand sanitiser, anti-bacterial wipes, a door-opening tool, disposal bags and ipad pen.’
Do valuers need to visit homes?
Property industry experts predict that in the longer term, valuations will increasingly be done using automated models and remote inspections, reducing mortgage lenders’ reliance on physical inspections.
Alistair Brown, an estate agent with his own firm, points out that many lenders are already using online ‘desktop’ valuations alongside the most recent comparable sales and verifiable data from RICS and other valuation data.
‘With so much reliable data available this is a simple, efficient and reliable way to cover this,’ he said.
‘Visibility is now easy with fish eye cameras able to capture the interior and exterior of the home.
‘There are new technologies such as Resivue which act like a digital sales brochure. This app in particular allows consumers to view a property through 3D tours and floorplans, connect with estate agents via live chat and has the ability to showcase any home, update property details and put it on the market in minutes.’
Montlake added: ‘Many lenders have been excellent in utilising automated valuations and desktop valuations and I expect this will continue to improve and become more prevalent even when transactions are back to some semblance of normality.’
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