Mutually Beneficial

Last year, many financial institutions reduced their residential mortgage lending yet Building Societies have grown their share of the UK market. Building Societies have proved a resilient source of mortgage lending to members in a very challenging market. This kind of commitment is the product of many successful composite parts. The mutual model is perhaps ideally placed to take a more bespoke risk based approach to lending to residential borrowers, many of whom will have an existing relationship with the society. A key element of the risk-based approach is the assessment of the security for the mortgage and the selection of a valuation partner whose expertise can be relied upon is critical. With the spectre of further falls in house prices, a deteriorating job market, and perhaps another recession, accurate valuations are as fundamental now to supporting this role as ever. Valunation understands this because we think like a lender.

To find out how we can help manage your valuation risks, Alison Beech, Business Relationship Director and Head of Valunation, outlines what every mutual should expect from its valuation and property risk management partner.

The housing market expects survey and valuation companies to provide informed, independent advice on a whole range of property types while at the same time being mindful of their responsibility to deliver a credible assessment of risk. There are many things to look out for when you are choosing a valuation partner that signal whether the expertise and experience you are buying can be delivered on a day to day basis. For building societies, Valunation offers a perfect tailored service founded upon a wealth of experience, expertise, and robust technology.

Our procedures are built around guaranteeing consistency and Quality Assured procedures to a Gold Standard. They deliver systematic measurement, comparison with a standard, monitoring, and feedback - all designed to prevent the possibility of errors. Quality Assurance means your partner is "Fit for purpose", and committed to a "Right first time", approach. In real terms, of course, this amounts to robust valuation procedures that include requirements to properly identify comparables and the application of clear justifications and valuation rationale. Our quality certified systems (ISO 9001:2008), risk management procedures, advanced technology and internal audit function, are all designed to underpin this philosophy. Quality means combining our people's expertise and experience with the best of breed technology. Comparables, that include detailed descriptions so individual characteristics can be taken into account, are sourced through various databases including company, industry suppliers, Land Registry and subscription websites, and these are then subjected to a final verbal check with on "the ground" sales agents or perhaps other surveying firms. These same technologies complement a comprehensive and up-to- the-minute technical, market, regulatory and lender information that form the valuation assessment and report completion.

Auditing is a necessary part of quality control. Point of valuation audit alerts highlight any valuations which might be deemed out of step with the prevailing market conditions. These can equally alert us to any factors which may not have been taken into account in the valuation assessment. This is supported by random sample auditing to ensure compliance with procedures and risk policies. Suspicious activity alert policies and processes where valuers can act to a certain degree as the "eyes and ears" on site for the lender, where concerns are reported to tie in with the special investigation team of the lender conducting checks for mortgage fraud. What's more we have played a fundamental role in helping shape an improved risk policy for our Society clients from our insights into industry developments and trends including methods of construction and fraud.

Ultimately, every Building Society should have access to their valuers. It's natural to want to be able to speak to the people on the ground. For smaller societies who conduct significant volumes of local community lending, we provide access to our local valuers to discuss local market trends and other local issues. But every lender also has access to the technical department for consultation on relevant issues. It's easy to underestimate the importance of good servicing. Things like direct points of contact to senior staff for daily queries, including instruction and report process issues, technical back up, regular review meetings, and monthly comprehensive management information packs build trust and understanding. It's a model that has worked for us for many years.

Hopefully, you already experience many of these services from your current valuation partner. I have listed some of the essentials. If you would like to talk to a survey and valuation partner who actively embodies these values, we'd love to hear from you.