1. 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

2. 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

3. Using AVMs: how do they impact on the RICS?
RICS professional standards
Education & training for valuers
Information for borrowers
Liaison with stakeholders
Education Trust

4. International literature review Interviews:
Research conducted
International literature review
Interviews:
Valuation & panel management companies
Credit risk & valuation managers at Building Socs & Banks
CML, AVM companies, PI insurers
Online survey
RICS Residential Professional Group: 473 responses
Correspondence with consumer groups
Education Trust

5. Low risk lending + multiple other uses
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

6. Valuation and survey levels
Does RICS guidance match current valuation & survey? Possible future
Research Findings: Current Valuation & Survey
Current valuation and survey
No detailed consumer advice
No detailed consumer advice
Detailed consumer advice
Non- inspection
Inspection
Time/cost
Level 3
Signing for FSA
Valuer checked AVM
Level 2
Level 1
AVM
Drive by
New Desktop
Not in Red Book
In RICS Red Book
Education Trust

7. 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

8. Any questions? Signing for FSA Valuer checked AVM Level 2 Level 1 AVM
Time/cost
Level 3
Signing for FSA
Valuer checked AVM
Level 2
Level 1
AVM
Drive by
New Desktop
Education Trust 8