The Intermediary – August 2025 - Flipbook - Page 10
RESIDENTIAL
Opinion
Multi-dimensional
hat do we mean
by value in
today’s market?
Perhaps more
importantly,
what will we
mean by value tomorrow?
Accurately assessing lenders’ capital
valuation exposure increasingly
requires more than an understanding
of market sentiment and liquidity.
While buyer demand and funding
availability remain fundamental for
loan-to-value (LTV) purposes, they
provide only a partial view of the
underlying risk.
Lenders must account for a broad
spectrum of variables that can
materially impact asset performance
and, ultimately, resale value.
This includes:
The property's physical condition;
Its age, build type, warranties,
management charges and incentives;
Exposure to environmental
risks such as flood, subsidence or
contamination;
Current and historical land use and
designation under new green, brown
and grey belt definitions;
Tenure, including ongoing leasehold
complexities;
The integrity and durability of
construction type and fabric.
W
Evolving legislative frameworks – such
as building safety or net zero mandates
– and uncertainties surrounding future
planning or land-use policy also maer
and are hard to quantify. Legal title
issues, restrictive covenants, easements
or absent documentation can cause
costly delays on sale. Where legal or
historical data is incomplete, latent
risk is inbuilt. How, then, can lenders
address these issues in a way that is
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The Intermediary | August 2025
both comprehensive and commercially
viable? At e.surv we have an answer
to this question – one we hope to share
later this year. It comes down to access
to comprehensive datasets that provide
enough nuance to be materially useful.
It’s a maer of scale.
Take automated valuation models
(AVMs). Data comes from across the
market. It must be timely, real-time
and of a scale that eliminates the
deviation that single anomalies can
create. People need to be involved to
ensure the validity and integrity of that
data. In future, AVM services will unite
automation, remote digital valuations
and proprietary insight.
Seamless application programming
interface (API) integration offers fast
and scalable deployment into various
business workflows. Data must be
improved, checked and auditable.
Ensuring it comes from one place
keeps third-party risk to a minimum,
giving regulators confidence and
lenders security.
This approach is true of developing
markets. The creation of new towns
as well as large scale, oen multiple,
developments that can double or even
triple the population of previously
smaller towns and villages have
massive implications for the value
of existing homes, as well as posing
all of the usual challenges new-build
comes with.
The number of lenders using our
new-build hub to gain intelligence has
grown at pace since the Chancellor’s
announcement on housing, now more
than a year ago. Lenders can track
their volume and concentration risk
across more than 16,000 new-build
developments in real-time, allowing
for smarter origination strategies based
on quantifiable facts.
