The Intermediary speaks to Richard Fisk about the future of technology, the importance of surveying in the new era of Consumer Duty, and the firm’s commitment to good customer outcomes.
First, can you tell us a little about your career prior to joining Legal & General? What led you to join the business?
My degree is in banking and financial services, and I have always worked in the industry in varying roles. Like many people in banking, my career started in a local branch serving customers and writing “refer to drawer, please represent” on cheques that bounced.
I was introduced to the mortgage industry while working for a third-party administration company which merged with Skipton Building Society’s Homeloan Management business.
I then worked with C&G, Lloyds, and Barclays in various operational, credit risk, and underwriting roles.
During my time at Barclays, I joined its valuations business and nearly fifteen years later I’ve remained in the valuation industry, having worked for e.surv and since 2015, Legal & General.
I joined Legal & General because of its values and culture.
The industry has changed significantly in the past few years and being at Legal & General means having an opportunity to innovate and make positive changes to the valuation and mortgage industry that deliver better customer outcomes.
How has the surveying market changed and adapted over your time with the business, particularly post-pandemic?
It has experienced significant structural changes. For instance, the pandemic prompted exponential growth in desktop valuations. These are valuations of residential properties that are completed remotely – without an internal inspection of the property.
Of course, during the pandemic, visiting people’s homes was limited and responsible lenders and valuation firms wanted to protect the public and their employees from the risk of Covid-19.
Since that time, risk management via desktop valuations has increased. As a result, technology to produce them has developed and data to analyse the risk of using them has increased.
At Legal & General, we have our own data scientists that continually monitor our decisioning model and apply a machine learning methodology to continuously improve conversion rates. But most importantly, they provide accurate valuations which our lender clients rely on.
Is more change on the horizon with further tech advancements, or does this advancement only go so far in an industry reliant on individual expertise?
There are definitely more technological developments on the way. For example, we are now analysing every valuation to generate the best outcome for every property type in the UK.
At Legal & General, we want to deliver the right valuation that a lender can rely on, be it from an automated valuation model (AVM), desktop, or when necessary, a physical inspection of the property.
This approach will provide accurate, cost-effective, and efficient valuation services to our lender partners. But our ultimate aim is to help all stakeholders in the mortgage journey.
With this in mind, we’re constantly evaluating how we can improve the efficiency of the intermediary by ensuring their application will be accepted by the chosen lender, without duplicating efforts and reducing the amount of chasing they need to do to progress mortgage offers.
We’re also looking at this from a lender’s perspective in order to improve efficiency and subsequently reduce the time taken to share the mortgage offer with a borrower.
Ultimately, by addressing these issues, we will be able to help customers through one of the most stressful times of their lives: buying a home.
What are the challenges for surveyors in 2023?
Adapting to new technology is an ongoing challenge in the valuation and surveying market.
Technology and data solutions have changed the industry, and surveyors will need to adapt to work in tandem with these developments.
Technology needs to be used with the right combination of human expertise in order to provide comprehensive and accurate valuations for lenders.
That being said, surveyors will not need to visit every property to provide valuations for lenders.
Of course, valuations on certain property types will still have to be completed with a physical inspection and surveyors will need to diversify into new markets.
The direct to consumer market is a prime example of where surveyors and technology can work hand in hand, and this is why Legal & General developed its own consumer survey product called the Legal & General Digital Home Survey.
This survey meets the same reporting requirements as the Royal Institution of Chartered Surveyors (RICS) Home Survey – however, it presents the results on the condition of the property and any potential legal matters that the conveyancer should check in a much more interactive and user-friendly format.
The customer can view their Digital Home Survey on their mobile phone, tablet, or PC and most importantly, there is no jargon, just a clear and simple explanation of any problems. It also shares advice on what to do, with supporting photographs.
It puts the customer in control by enabling them to email builders, tradespeople, or their conveyancer, to ask for quotes so that they are fully aware of the costs of any defect or any legal issue that the property may have.
How can intermediaries ensure that clients understand the importance of surveys, particularly at a time when buyers will be looking to cut costs?
Remarkably, only a minority of buyers commission a survey on the property they are buying. We should all encourage buyers to seriously consider having a survey completed before they make a purchase as it could save them thousands of pounds.
This must be a consideration under our duty of care too, especially in the new age of Consumer Duty regulation. There can be little argument that it’s in a customer’s best interest to have a survey completed.
Therefore, if intermediaries understand how lenders are valuing the property for mortgage lending – and that this could mean no physical inspection of the property is carried out by a surveyor – then they can better inform their clients of the potential risks of not getting one.
Legal & General can help with their education of the valuation process and explain this to their customers.
We must be able to clearly differentiate between a valuation being for the lender to assess the risk of the property as an asset, and the survey being for the buyer’s own advice and peace of mind.
Are there any big trends for the property market you are on the lookout for over the rest of the year, or into 2024?
I think the UK property market is resilient and, although there may be a modest reduction in the number of transactions, demand will continue to exceed our limited supply of housing.
Once the current inflation and interest rate environment calms and certainty returns, I think we will see transactions start to increase.
What about for the business, what developments will we be seeing in the near future?
My objective, and our objective across Legal & General Mortgage Services, is to continue delivering the best possible customer outcomes.
Within our division, we have ambitious plans for our surveying business, Mortgage Club, and Ignite technology.
The full integration of these tools and services will result in the transformation of the mortgage journey for intermediaries, lenders, and customers alike – this is something we’re incredibly proud of.
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