Integrating automated valuation models AVMs with valuation services
- Slides: 8
Integrating automated valuation models (AVMs) with valuation services to meet the needs of UK borrowers, lenders and valuers Mary Lou Downie & Gill Robson School of the Built Environment Northumbria University Newcastle upon Tyne Funded by the RICS Education Trust & RICS Residential Professional Group 1
Research background and issues Where we began: AVMs, an international perspective, Downie & Robson (2007) for the CML This took us to AVMs in the UK The research focus: Integrating AVMs with valuation services to meet the needs of UK borrowers, lenders and valuers · Lenders’ valuation policy & valuation process management · Current & future AVM use by lenders & valuers · Implications for borrowers Education Trust 2
Using AVMs: how do they impact on the RICS? · RICS professional standards · Education & training for valuers · Information for borrowers · Liaison with stakeholders Education Trust 3
Research conducted 2008 -9 1. International literature review 2. Interviews: · Valuation & panel management companies · Credit risk & valuation managers at Building Socs & Banks · CML, AVM companies, PI insurers 3. Online survey · RICS Residential Professional Group: 473 responses 4. Correspondence with consumer groups Education Trust 4
What we found · Low risk lending + multiple other uses · AVM expertise concentrated in lending organisations · 22% of survey valuers have used an AVM, 64% have not · 39% want to use them to supplement valuations, 28% do not · 72% expressed willingness to learn more about AVMs · Negligible acknowledgement of AVMs in consumer information · Valuation fee transparency Education Trust 5
Valuation and survey levels Does RICSResearch guidance match current valuation & survey? Possible future Current Findings: valuation Current and Valuation survey & Survey Detailed consumer advice No detailed consumer advice Not in Red Book Education Trust Level 3 Level 2 Level 1 Drive by Inspection New Desktop Valuer checked AVM Signing for FSA Time/cost Non- inspection In RICS Red Book 6
How might the RICS respond to IT enabled residential valuation? Work with stakeholders on a selection from this menu: · Limited response · Issue policy statement about AVMs · Amend Red Book · Information Paper · Improved consumer information · Education and training Education Trust 7
Education Trust Level 3 Level 2 Level 1 Drive by New Desktop Valuer checked AVM Signing for FSA Time/cost Any questions? 8
