The Intermediary – November 2025 - Flipbook - Page 9
T E C H N O L O GY
In focus
parts slowing the process down further.
Stevens adds: “The reason why most of
our offers last six months is that it can
take that long for the transaction to
complete.”
Valuations are a key part of the
homebuying process that has
historically caused delays, but that has
the potential to be transformed by
technology and data.
Andrew Vaughan, head of customer
management at e4 Strategic, says:
“Automated valuation models [AVMs]
have changed the industry radically
since they were introduced in the late
1990s.
“In the early stages, lenders used
them as due diligence to review their
mortgage portfolios.But now they are
used widely by lenders on low loan-to-
“No offence, but I’d rather not deal with a human”
value [LTV] deals, where the bank has less
money at risk, and remortgages, where a
recent valuation exists.”
In just over 25 years, AVMs now account
In June, the Department for Science,
Innovation and Technology passed the Data
for between 30% to 40% of all valuations.
These computer valuations weigh up a range of
(Use and Access) Act, which it said will allow the
data, such as the sales history of a property, when
growth of digital verification services and “smart
it was built, and sale prices of similar homes in
data schemes like Open Banking.”
The department says this legislation, which
adds to General Data Protection Regulations
(GDPR) passed in 2018, is “a permissive
framework under the UK GDPR for organisations
to make decisions based solely on automated
processing that have legal or similarly significant
effects on individuals.”
However, it adds consumer “safeguards,”
the area, to produce a valuation in seconds. This
is compared to the hours it might take for a
surveyor to physically inspect a property.
It is also quicker than desktop valuation,
where surveyors use a mixture of online data,
house plans and pictures to assess homes
– including newly built buildings and even
unfinished properties.
For large lenders, which value millions of
which say that firms must provide people with
properties a year, the appeal of an AVM is clear.
information about significant decisions made
At scale, they range from a few pence to around
about them, and allow “human intervention”
£2. This compares with between £85 and £150
to challenge these decisions. The Government
for a desktop valuation, to between £150 to over
adds that part of the aim of the Act is to make
£1,000 for a complex physical survey.
data “rules simpler for organisations” and to
“encourage innovation.”
Automating the process
Rob Stevens, head of property risk at Nationwide,
Nevertheless, AVMs have their drawbacks. For
example, they need a range of data to reach valid
conclusions. They are, therefore, less reliable on
remote rural properties, compared to an urban
row of terraced Victorian houses with lots of
says that the time it takes for the mutual to offer
recent house sale information. The system also
a mortgage depends on whether the application
works less well on new-builds for the same reason.
journey can be automated.
If it is a digital process, the mutual provides
Firms are exploring the greater use of AVMs on
new-builds, given the Government’s ambitious
instant offers, but it can take, on average, around
housebuilding targets. Currently, though, AVMs
two weeks if a manual process is required.
are used on only around 10% of new-build homes.
The time to get a mortgage is only part of the
efficiency equation, however, with other moving
Bad data is also a problem. While the push to
build and sell more houses – and get
p
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