Transcript
Welcome everyone, to episode 12 of the Scaffold Surveying Solutions podcast. Today I am thrilled to be joined with SDL's very own Adam Baker. Normally at this stage I'll do like a really long winded introduction and tell everyone about your history as a surveyor, but I genuinely don't think I'll be able to do you justice.
So what I'm going to let you do is I'm going to let you introduce yourself to our audience.
Yeah, well, thank you for that. Thanks for having me on, Rhodri. Hi, everybody. Nice, you know, to see you. So my name is Adam Baker. I'm a residential chartered surveyor. I started in the profession, or kind of, you know, a long, long time ago, kind of 40 years ago, you know, as an estate agent, became an article clerk, started the RICS, correspondence course, etc.
And for the last 20 odd years I've been your, you know, typical residential, you know, you know, mortgage valuer. A large part of that I've been in management and I'm now SDL's field surveying director, which is a very grand title. But what I do is I, you know, I support our managers and I support our surveyors to keep, you know, to provide the best quality reports they possibly can and to be as happy as they possibly can.
So, so that's, that's who I am and glad to be here. Yeah.
Perfect. I mean, with, with that in mind, obviously the topic you're very well placed to discuss with me today. So with Adam we're going to be discussing, our discussion is going to center around like the market in general, maybe touch on the numbers of personal vows against avm. Vows.
How many people are looking at mortgages, mortgages, valuations when they buy a property and is there a kind of, you know, what's difference between now and, I don't know, say 10 years ago? So all things that you should be very familiar with in your vast experience without making you sound old.
Yeah, well, I do feel old some days, but yeah, I mean, it's constantly changing, isn't it? You know, I mean, you know, if I, if I look back to when I started, you know, the, you know, the tech that's available, you know, has changed, the market has changed, the client requirements have changed significantly.
And I mean, I think whenever there's change, it always takes a little bit of time for people to adjust. But you know, I think generally as a profession we're in a hell of a lot better place than we were, you know, 20, 30 years ago. But some people may dispute that.
But, but yeah, there's been, yeah, there's certainly been, you know, there's certainly been a lot of, you know, you know, change and probably, you know, the two periods that affected that, I suppose there was a, there was a major shift after the financial crash of 2007, 2008 that made kind of surveyors and valuers, you know, and people in the mortgage lending market really kind of reflect on, you know, what they did.
And then I suppose the pand had a big influence in how things have changed because I mean, from that certainly desktops, which were a kind of concept and our mainstream within mortgage lending.
Yeah, I mean I was going to say you pretty much answered my first question. What were the major kind of shifts seen in residential property market over the last decade or so? But you talk about that original. Well, not the original, we've had many, but the kind of. Was it 2009, 1011 crash?
Yeah, well, but you know, I remember it vividly. I, you know, I, I no longer have nightmares over it. But yeah, it was difficult time, you know, started 2007, 2008, effectively 2009. But then the market stagnated for years really. And you know, and then, you know, from that there was loads of, you know, changes that, you know, that happened.
I mean, I think that, you know, if I look the, I mean the, you know, the valuation requirements, the methodology kind of got, you know, you know, significantly fine tuned, you know, you know, there wasn't right move, you know, surveyor comps tool back in the day. We didn't have, you know, that, you know, available data, you know, to call on.
So the data's improved. Significant the valuation, you know, methodology, although in theory the same in practice, what valuers are doing now is far more in depth and robust than what we may have considered before was reasonable. And the tech has improved.
I mean the vast majority of people now are using kind of smart technology, iPads, iPad pros, iPhones to do their kind of surveys and valuations. And I suppose that the, the actual, you know, surveying equipment's improved, hasn't it? So you know, people doing kind of bespoke, you know, surveys are going to be using drones and telescopic poles that they weren't available 10 or 15 years ago.
And there's a lot more data about, you know, you know, we, we didn't have all that, you know, data, you know, at our fingertips, you know, regarding kind of, you know, flooding, radon, sold prices, etc. Etc. I suppose a lot of that data is in the public domain though, isn't it?
So, you know, our lender clients, you know, a purchaser clients can actually access some of that as well. And I suppose that's the difference between an avm, which is a, which is a, you know, an automated, you know, computer generated assessment of a valuation of an estimate of a property, so not a valuation, and a kind of desktop or kind of mortgage valuation which, which is where the valuer uses that data that's available in the public domain that a computer could assess.
But we then use our expertise and our market knowledge to come up with evaluation under the confines and the requirements of the RRCs. So yeah, loads of changes, I suppose we've also had kind of Grenfell. So there's been significant changes to what we have to consider with flat valuations, with cladding, we've got the green agenda which kind of arrived and then installed, hasn't it?
You know, and you know, I suppose government haven't necessarily driven, you know, you know, you know, the, the private sector to have to consider that space and it's, it's really the public sector that are looking at that. But you know, those are things that are all kind of new that certainly weren't around 10 or 15 years ago.
No, say, interesting you brought up the kind of avm. So how do you think the balance has changed between like a physical in person valuation and an AVA AVM based one? You talk about shifts. What do you reckon that means for the reliability and quality? Because my understanding and I can, I've done a fair bit of reading up on AI and AVR app and automated valuation was very much a, based on AI algorithms and so on, so forth and programming.
But what they can't necessarily take into account is something that a surveyor on site can, which, you know, a lot to do with the conditions and other underlying factors that just information that's available to you might not take into account. So yes, you can go on and look at radon flood zones value, you know, in the vast amount of comparables that you can get from different data sources, including rightmu plus and stuff.
But do you, I'm not going to hold you on the spot to this, but do you think all that data is enough to justify evaluation whereby someone's borrowing probably the most amount of money they'll ever borrow based on an asset effectively that a surveyor can also do?
Yeah, Well, I suppose that for discuss how long have we got? I suppose, you know, from a lender's perspective, you know, the valuation isn't for the customer, is it? It's for, for the lender to make a, you know, you know, a lending risk decision. And 10 or 15 years ago, you know, there wasn't the AI available, there wasn't, you know, you know, AVMs and there's something that's kind of entered into the market and I probably incorporate AVMs, you know, and desktop valuations within the, you know, this assessment.
Obviously an AVM isn't a red book, you know, valuation, as I say, it's a computer generated assessment. And the, you know, and it's up to the lender, depending on their risk profile, what they would consider is and isn't suitable. So certainly a lot of smaller societies probably wouldn't consider, you know, you know, a reasonable percentage of AVMs, if any at all.
And some of the larger lender institutions then obviously they would have some AVM models that they would use to make some lending decisions. But that's going to be on fairly tight kind of lending criteria. They're not going to do it on a high risk location with a potentially high risk customer.
As regards desktop valuations, they are red book valuations. I think the definition is remote valuation without inspection. Theoretically everything that the valuer considers should be the same apart from they don't drive to the property, they don't walk around the property, they look at online data to make an assessment of what it is.
And I think now, I mean, it depends where you get your information on from, but probably 30% of the UK mortgage lending market, a decision on lending might be made
on an AVM or desktop basis, but that's the lender's decision. Obviously, you know, if you're a purchaser, you know, then, you know, I suppose you should consider that, you know, nobody will have been round to the property, you know, making an assessment of its kind of, you know, suitability. And although the mortgage valuers remitted to the lender, if it's unsuitable security or the value is too high, then they'll put, then they'll say, well, it's either unsuitable security or they'll reduce the valuation. Which is for, which is in the customer's interest, isn't it that, you know, they don't want to overpay for a property.
But I mean, there's certainly been a, you know, a shift and I think as the market kind of peaks and troughs that will wax and wane, I certainly think they're here to stay. Rhodri. I don't think, you know, you know, the, you know, speed and cost are the two reasons that, you know, lenders will want to use them.
I suppose they also reduce the risk of human error, but it's mainly risk and cost that they'd be used. But I think that in reality, you know, whether it be a lender or you know, a, you know, a purchaser customer, they will always, or they should always want somebody professionally to go around and have a look to give them some advice.
I know, you know, we're bound to say that because, you know, I'm trying to feed our profession. But it's not that it's about giving, you know, it's giving the general public the best advice.
No, and say, and I think we'll touch onto that next bit in a minute. But going back a step. So you, you talked about a particular uses of the, the AVMs. In your experience, are there any particular kind of property types or regions where they consistently, I say consistently fall short?
Let's change that. Let's say, are there any regions where they're more widely used? Because we talk about the risk reward. So I'm assuming, I'm assuming that you possibly would maybe avoid central London where there's a massive variation in, you know, when I was always told valuations and valuations and property prices always center from the epicenter of the kind of major city and then it just ripples outwards.
So if there's going to be a fluctuation in the economy, particularly around the property market, nine times out of 10, it probably starts in center of London. So does that increase the risk there? And there are the other regions where you think a more in person valuation is kind of needed for throughout the country?
Well, I suppose it's more difficult to do an AVM on a flat because you could have, you know, you could have cladding issues. You know, the valuer needs to consider the, you know, the terms of the lease. So, you know, unless the computer is actually able to assess the lease terms, you know, the, you know, the ground rent, you know, you know, terms the service charge.
So I suppose you're right.
Yeah.
You know, there are probably less AVMs less desktops in and around area big city centers like London where there are a lot more flat valuations.
You know, I suppose, you know, some very high value, you know, properties, you know, with, you know, high end rural properties might be a little bit more difficult to do on an avm, you know, whether they've got, you know, significant acreage and outbuildings and annexes and everything else. But yeah, So I suppose AVMs are again, it's all about risk appetite.
You know, they're really for you're more vanilla type properties where there is going to be more data available. Where there isn't that data, you know, an AVM isn't as suitable and it would make sense to, you know, to, you know, to go out to a physical valuation and that's what the lenders are doing at the moment.
So, you know, they, I'm sure they have systems that would assess them for AVM and if they, if they are not suitable for an avm they'll push them to a desktop. And if they're not suitable for a desktop, either the lender or maybe
the individual surveyor doing the desktop assessment will then push them through to a physical inspection
in order to triage the management of the risk. Which kind of makes sense.
No, absolutely. So then moving forward then. So we've talked obviously about the valuation being basically on behalf of the lender for their risk and reward and so on so forth. So let's flip on his head then. So you're, you're now the, the client, the person, the purchaser for lack of a better word.
You can get evaluation done and you can get a condition of the property done via a survey. Obviously it's one of the main things I deal with is surveys. But what percentage of buyers these days commission surveys before purchasing? And I'm not going to ask you for exact stats because you may or may not have them at hand.
But how would this compare to some, I don't know, 10 years ago and seen a decline or is, you know, this kind of more, I'm not going to use word flippant because that's a really bad choice of words. But that kind of more lack of in person feedback from an evaluation that's not even in their benefit.
How much more would they rely on the surveyors to go out and have a look at the condition of a property and, and even give evaluation in some instances?
Well, they should. There seems to be an increase in, and I don't know whether you're finding within your business there seems to be an increase in, in surveys, excluding evaluation. And, you know, to some extent I can kind of understand that if a purchaser's happy with the figure they're paying, you know, that they might not necessarily want to pay that little bit extra to get the valuation.
And that's really up for them. They want to know about the condition. I certainly think, you know, purchasers should be considering having somebody to go around because if you're not having, unless you're familiar with how properties, the nuts and bolts of how properties are put together and you've got a good command of, you know, of values, but it's a bit like you're very good with it.
I'm useless with it. I need support with it. So I wouldn't dream of trying to do something myself. I'm terrible with mechanics as well. So if I'm anything to do with automobiles, I would get some professional advice. And I would imagine a lot of people are like me. They might be confident in some aspects of life, but not, not many of them will really be familiar with properties and construction whatever.
So they should be having somebody look at the property. I mean, I think that the.
I vaguely remember feeling as we came out of the pandemic that around 1/5 of people, about 20% of people were having kind of a survey. I did some research earlier because I kind of thought you might ask me that question. And the latest report says it's gone down to about 10%, which is fairly horrifying,
possibly down to the cost of living crisis. People trying to, you know, you know, you know, save a little bit of money, especially as professionals. And I'm not just talking about, you know, surveyors, but that, you know, the legal profession, you know, the, you know, financial services profession, I mean, they have to treat people, they treat customers fairly.
You know, I know that a lot more brokers are, you know, advising their clients that they should really get some advice from a surveyor or valuer. And I know the law society, just before you exchange contracts, you know, will quiz whether or not you've had, you know, a surveyor look at your property.
So I think, you know, cross industries in the property profession. We're trying to get the message out, but it looks certainly from the data that's online that kind of fewer people than, you know, we'd ever think are having some professional advice, which is, which is worrying.
No, I say, I mean, I'm going to try not to be too controversial here because I'm not trying to be controversial in any way. But do you not think that that decline might also have a little bit to do with a, a decline in faith in the industry, I guess.
I don't, I don't personally believe that that is the case in terms of the professions in trouble or anything like that. But sometimes you do get people saying oz. I mean, I watched Clarkson's farm. I don't know if you've watched Jamie Clarkson's Farm. So in that, in the episode he basically had a survey done in a pub that he was buying.
I don't know if I'm supposed to trademark this, whatever, but he basically said in, he had this massive document goes, oh well, basically whatever survey you get, they're going to tell you the property's falling down regardless of it's not because if it does fall down, they're covered. And I sometimes worry, I mean that's just a general perception of him as, you know, okay, he's not necessarily your standard public, but that's the general perception of the industry that I do get from, from outsiders sometimes.
And it'd be interesting to know if that's the general perspective what people think of surveyors and if so, it's such a shame because of all the hard work that surveyors go through to make sure that they're, you know, compliant and regulating. But then I think on the flip side, so shift tracks here, there's a massive home survey standards review going on.
So is this taking, is this taking part to address these issues? It's a very open ended question. It's more of a statement than a question.
Yeah, well, I, I suppose just thinking about it, you know, 10 or 15 years ago we didn't have online trust pilot reviews, you know, people didn't have a forum to voice their disappointment. Okay, you might get a letter through the post
and then maybe 10 years ago letter in the post or you might have got an email to say you weren't very happy. But now people can actually voice that and you, you know, I, I tend to find that people never really shout out about an experience they've had that they're kind of happy with, that was fit for purpose.
They only really shout about it when they're unhappy. You never really, you know, you never remember all those meals that you went out for that were quite nice, that were, you know, you know, you always remember the ones that were, you know, where the service was poor or the food quality was poor.
So I suppose there has been an increase in public awareness of, you know, errors. I'd like to think as a profession we've tried to improve things, things you know, there has been, you know, a kind of increase in kind of standard phrasing within, you know, reporting. But I suppose from a kind of semi corporate point of view, my kind of argument to defend that would be, you know, you know, what we're trying to do is we're trying to provide some sort of standardization for surveyors, then to use that, you know, phrase template and adapt it to make it specific to the property.
So, you know, that combined with an increase in the number of photographs that customers are getting report, you know, in reports, I'd like to think that, you know, and also reports are now or they should be in plain English. So whereas 10 or 15 years ago, you know, surveyors, you know, would regularly use technical jargon that people didn't understand.
So I think for those three reasons, you know, the customer should be getting. You know, a, you know, a better product and I don't think it's good. You know, I don't think there's been any change in the, you know, in the quality of, of surveyors. There's been an increase in asset rig surveyors, but before that they were tech rig surveyors.
And, you know, the majority of them are trained specifically in, you know, residential valuation and survey. I mean, that's that, you know, they're for, they're trained in that forte.
So maybe Rhodri. There's just a little bit of apathy with all professions and all products that are. But it's because people now have forums to, to kind of vent their, you know, complaint and concern.
But no, I think you hit the nail on the head. You're right. I've never really thought about that way. People will always shout about something they're not happy about, but if they're, you know, if they're just happy with what they know, they pay for something, they got something and it's done its job.
It's not something you shout about really, is it? But, and that, I'll be honest, I think that's the problem with the world. I'm going to get into my philosophical views of the world these days, but social media, for example, you never go on there if you're looking to cheer yourself up, do you?
You basically go on there if you're looking for an argument with someone that you've never met before. So I think that might be part and parcel. But it's interesting what you say about standardized phrasing and stuff like that because obviously, I mean, I'm not going to plug scaffold. I try and avoid doing that, but yeah, one of the big things we worked on was having the ability to have these standardized phrasing, but it's so important to be able to customize them and bespoke them is something we strongly recommend and something that's massively built into our system.
So, yes, you can go then you can make sure that you're speaking incorrect, you know, understandable English and not baffling people with acronyms because you could go through the whole Alphabet really, but then also making sure that you have the ability to really bespoke that to the property you're at because no two properties are the same.
And I think, you know, surveyors need the ability to really hone down on what they're looking at. And finally you talked about like asset Ricks and. Well, Rick's Tech was it they used to be called.
Yeah, it Used to be called tech. Tech Ricks. Yeah. Yeah.
So I mean, yes, there's a, there's a, you know, from, from establishments like Sava and stuff. There's some really good pathways of getting through, you know, the even Ricks, them going through their kind of associate Ricks APC way. And yeah, you know, you do get some seasoned surveyors that are a bit like, oh, you know that they're not the same and you know they're not.
But in 10, 20 years time, there's going to be a lot of 10, 20 year seasoned surveyors that have been doing the job for a very long time. And it's only going to hold the industry in a, in a, in a, in a strong place off the back of it.
So, you know, you've got to build good foundations before you can build a tall building. There's actually really good surveyors acronym there. So final question for you then. So with more online data and tools at the buyer's fingertips. We've talked about that. Obviously, you know, you can go online and find out anything really.
And people's trust in surveys obviously touched on that as well. How are, so we're going to flip to your kind of your job role now. How are sdl, are you adopting to meet these kind of evolving expectations and how, you know, how have you dealt with the market shifts that you've talked about there and you know, keeping your clients happy, keeping your surveyors happy and keeping, you know, the bottom line happy?
I guess. Yeah.
Well, I suppose, you know, God, loads of questions in one the,
I suppose, you know, you know, as a bit, as a business, you've got to kind of, you know, look to the horizon, see how things are changing. And I think we, we realized some time ago that there was going to be a little bit of a shift in the market.
You know, our, you know, CEO Simon Jackson, I remember probably about eight years ago, showed us a graph and it didn't have any specifics on it, but it just showed that over the period of time, you know, over a period of time there would be an increase in the number of AVMs, an increase in the number of desktop valuations, there'll be a decrease in the number of physical mortgage valuations slightly.
And surveyors will need to fill the gap in people's kind of, you know, diaries and work days with, with some surveys and some different types of surveys. And I think that kind of rung true. So we started in the pandemic because of the need to have to do some kind of remote valuations.
We weren't allowed to get out the house. So for two or three of our clients, we devised the desktop process that we thought was robust to provide customers with our clients with the best advice. And then after the pandemic, that kind of rolled out and we, you know, we built an app and that basically links into our lender systems for us to do some, you know, some, you know, desktop valuations, remote valuation.
So that's one way we adapted. I'm very mindful, you know, I think, you know, and it's the same probably in all industries. You know, we, you know, you think about, well, what's best for you as a surveyor. You think about what does, as a surveyor, what do I want to say to my customer?
And I think over the last few years as an industry, we've turned that on its head and we've kind of looked at, well, actually, forget how we want to put things over. How does the customer want to receive the report, you know, the survey? So we have looked at the client requirement, the customer requirement.
Did they want more photographs? Did they not want more photographs? So we've done quite a bit of market research on that. We've adapted certainly on our, you know, our private survey products. Try to provide something that is more in line with what the customer wants to give them advice
and, you know, apart from that, you know, try to provide our surveying workforce with as much data as is possibly available. You know, we've got to be, you know, I think, you know, marginal gains, I think is, you know, is, you know, is important, you know, you know, why should somebody spend 20 minutes, heart an hour a day searching for loads of information, you know, around evaluation, flood data, etc, if it's available online and we can supply that to them.
So we are looking to supply as much data as we possibly can, you know, to sit alongside, you know, the, you know, the notes that they make on their physical inspections or desktops or surveys to try and advise their clients accordingly. So that's the way we've, you know, we've gone, seemed to be, seems to be working.
You know, we, we seem to be in a good place and the market seems to be generally good at the moment. I mean, it, it kind of seems to be defying the economy. We've just had seven CPD events all around the country and, and certainly in the slightly lower value areas, kind of parts of the Midlands, the North, in Northern Ireland.
I mean, the market is moving a little bit further, you know, more buoyantly than in the south east and London. But it's not too bad there. And in Northern Ireland for instance, we were there last week and they were saying that house prices have gone up 10% in the first quarter of the year.
Rents have gone up 25% this year, which is, which is crazy.
So
there was one thing I was going to say I, I remember that the last time rscs did a survey, sorry the rics, I think this was pre kind of the first survey standards that came out Rhodri the rics had done a survey and they got some statistics on the percentage of people that were having a, you know, a survey done but they also provided some percentage on the number of purchasers who had a survey that used that survey.
So to not necessarily
chip away at the purchase price but to become informed of defects they weren't aware of. And it was something like 35 or 40% of people who had a survey actually found the data was absolutely essential for them to make decisions regarding either their purchase or repairs and maintenance for the property.
So it just emphasizes the need why people need that insurance policy, don't they? They need us to go. Which is what it is.
Yeah. It's interesting because I mean when I, when I was pre survey pre property when I was just living my best life as a professional rugby player and I bought my first house it was very much that I had a survey done because I was working to a very tight budget.
You know the cost of moving, buying something hundreds of thousands of pounds. Luckily this was pre, pre the collapse and had 105% mortgage which was lovely but I only had a certain amount of money. So if I bought a house and there was an issue with something quite severe, I wouldn't have been able to afford to fix it.
So you know that's, you know if you're spending a lot of money on a house you've got to make sure that what you're buying is what it looks like in front of you and there's not going to be a massive outgoing of your own money to fix stuff. And that's what it comes down to, isn't it?
And if, think if we can get the client's perception getting back to that and actually delivering on that, I think the profession will be in a, in a really good place say on the other side of things. I've heard nothing but good things about sdl. I've never met someone who's worked for or with SDL that has not been happy.
So whatever you're doing on the, on the, on the kind of employee satisfaction side of things, you're doing a bang up job, so fair play on that. But no, other than that, it's been really, really good having a chat with you because it's, it's always hard to think of a good topic to speak to with someone like yourself.
That's not, you know, it's just got a vast knowledge about, you know, the, the industry as a whole, whether that's, you know, based on the history, the past. Not saying you're old, but, you know, you've obviously gone through some significant shifts in the market and I think everything you've said has been really, really insightful.
So just a massive thank you for joining me on this, on this podcast. It's been an absolute privilege.
No, well, thank you. Thank you. And nice to look at your, your sea view as well in the background.
Yeah, I live on the coast. I live on the coast.
It's all right for some. Yeah, yeah.
Well, no, thank, thanks. Thanks again and yes, I'll look forward to catching up with you another time as well. But again, on behalf of hopefully the scaffold podcast viewers. Yeah, thank you very much.
Yeah, thanks everybody. And thanks, Rhodri.
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