Totally automatic valuations to stay

Automated valuations look like they’re here to stay. Launched by specialist lender Kensington Mortgages in October, they’ve already changed the way many people get their mortgages. And more importantly, they’ve changed the speed.

With the old system, it could take weeks for someone to get a mortgage valuation. In that time, another buyer could have stepped in. Research shows that many people lose their chosen property or lose money while waiting for a valuation. Kensington’s new system seems set to change that.

It works by comparing a property against a database of others in the area, using sales and Land Registry data to get a value for the property. Of course, this doesn’t help with properties that are in isolated areas or which have unusual features, so the technology won’t benefit everyone. Kensington’s linked this with e-iDs, a quick way of checking people’s identities.

Kensington is not the only lender to go for this technology. GMAC-RFC, another specialist lender, is also offering it. Now you’d think that quicker online valuations would be cheaper for mortgage customers, wouldn’t you? Well, you might be wrong. Charges vary between around £300 and £900, depending on the lender. In some cases, this is even more costly than a standard valuation.

So, does it really help consumers get faster mortgage offers? So far, the answer is yes. In the first week of using the automated valuation technology, Kensington produced a mortgage offer within 12 working hours. And one of GMAC’s packagers produced 17 offers on the first day of using the lender’s point of sale technology.

With ING Direct recently announcing that it will use Hometrack’s automated valuation technology, it looks like instant mortgage offers will come into their own within the next year. Several intermediaries are already using them successfully and up to seven major lenders are expected to incorporate the technology soon.