Brokercast: Innovation in valuation, with Daniel Owen-Parr

Brokercast is a regular series from Allica Bank that aims to help brokers get better outcomes for their clients.

In episode 2, Allica Bank’s Head of Operations Nicola Tunney sits down with Daniel Owen-Parr – Commercial Director at VAS Group, a key valuations supplier for Allica Bank with a panel of 190 valuation firms around the UK – to talk about recent initiatives to streamline the process and how banks, valuers and brokers can work together to move things as quickly as possible.

Nicola began by asking how the pandemic has affected VAS’ business and the way they work.

“There’s no doubt it’s been a challenging year,” Daniel began. “But market difficulty and opportunity go hand in hand. Initially, it was really tough – the volume of work dropped off quickly. But the entrepreneurial side of the market soon showed its face with certain lenders, such as Allica Bank, eager to do business.”

Lockdown was hardly conducive to valuation work. “Desktop research is not ideal but it allowed us to keep the property market afloat in those early days. As soon as lockdown was lifted, our valuers rushed out to inspect sites.”

“Government restrictions have now become less onerous and lenders have been keen to do more commercial mortgage work,” Daniel continued. “Our valuers have been able to get out and about in a way they couldn’t before. And most asset classes are fairly straightforward to value – with the exception those in more busy areas, like multiple occupancy residences in city centres.”

And things are looking up. “We’ve seen a lot of growth in recent months. In fact, we’ve done more business in certain months than any time in our history. That’s partly due to new lenders like Allica Bank hitting the market determined to help smaller businesses.”

Nicola was keen to talk about a recent VAS update to the valuation process. “Tell us about the work you’re doing to make the process quicker and easier for our brokers,” she asked.

Daniel said this had been a priority. “The pandemic gave us time to look at our systems,” he began. “Our business is all about building relationships with lenders and their broker partners. So, although we’re not a technology company, we’re doing everything we can to create a smoother process by using the best of the technology out there.”

“Take our lender dashboard as an example. It’s the main channel of engagement between us, Allica Bank and its intermediaries, so we’ve invested a lot of time, thought and money to make it as straightforward as possible. It’s the start of the journey for anyone working with us, so it’s a crucial part of our offering.”

“We’re also looking at building a new payment link,” he added. “Look out for that later in the Spring. And we’re exploring what we can do with APIs to connect even more seamlessly with our lenders.”

“For us it’s about creating lots of incremental gains – improving every touchpoint a little at a time – to make the whole process quicker, slicker and more intuitive.”

Daniel was quick to stress that people would remain the basis of their operation. “If commercial property lending was easy and formulaic, then there wouldn’t be humans involved – it would have all been automated by now. But in this market, everything isn’t always as it seems. That’s why our team of 20 valuation experts will always be there to support brokers and our lending partners.”

Nicola said this was also an important part of Allica’s proposition. “We’ll always use the best technology to reduce the risk of human error, manage timescales and avoid miscommunication,” she agreed. “But people come into their own when the situation’s a bit more complex. You can’t talk things through with a computer to help them understand.”

Nicola turned to brokers’ involvement. What can they do to help speed up the valuation process?

“It’s all about doing due diligence work up front,” Daniel began, pointing to Bob’s advice in a previous episode of Brokercast. “Just five minutes spent on Zoopla, Rightmove, or a number of other commercial property data providers, can give the broker a good idea of whether their client is being realistic about the value and have categorised it correctly. By confirming this information early, it sets everyone up for a quick, simple valuation.”

Explaining further, Daniel outlined the impact of bad information at the beginning of the process. “65% of our valuers are local, and they’re very busy people. If they go to check out a property that’s been miscategorised they might reject the job or provide an inaccurate estimate, which could come back to haunt the client at a later stage.”

Nicola highlighted this as an important piece of advice. “Brokers are busy people,” she said. “By investing a small amount of time early in the process they can avoid the hassle of back-and-forth emails and phone calls later on to clarify certain details.”

“Not only that,” said Daniel. “We understand that the valuation is one of the activities that can tie up a lending decision. By getting it right at the start they can speed the whole process up by hours or even days.”

We all want to get a deal moving and across the line as swiftly as possible. With valuations an essential part of the decision-making process, brokers can help speed things up with some simple due diligence at an early stage.