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Episode 31 - Part 2: What is the potential shape of residential surveying in the future? with Steve Lees
63 Plays1 year ago
In part two of this episode, Steve Lees from RICS provides valuable insights into the future of the residential market. Here are five key takeaways:
- Potential Shift to Scottish Model: The discussion explores the possibility of adopting Scotland's statutory home report model to improve transparency and reduce issues in the home-buying process.
- Legislative Changes Required: Emphasis on the need for legislation to mandate pre-condition surveys, as voluntary uptake remains low despite their benefits.
- Technological Advancements: Examination of how emerging technologies like AI, drones, and modern construction methods could revolutionize home surveys and property assessments.
- Market Education: The need to educate consumers that mortgage valuations are not comprehensive surveys, and the importance of getting detailed home surveys to protect their interests.
- Impact of Climate Change: The role of residential properties in achieving net-zero goals
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Transcript
Future Models of Residential Market
00:00:00
Speaker
So in part two of this episode with Steve Lee's from the RCS, we're looking at the sort of the future of the residential market and what the model might be. um So if you didn't check out topic one, that was all about the home survey standard as it is now and the review that's going to take place around it. But it'd be really interesting interested to get your thoughts. Obviously, this isn't to do with the home survey feature specifically in terms of the the review that's coming up. But what do you think the future of the residential side of the the process is? is it Is it looking to move to a ah Scottish model you know with the home report side of things? Yeah, really interesting. I think um obviously home information packs were looked at in the early to late 2000s, obviously 2010.
00:00:45
Speaker
um The proposal looked like I had momentum but it was scrapped and that created a little bit of angst within the market. But we do look at our neighbors in Scotland around the work that they do. And is that a potential way forward.
Importance of Upfront Information
00:00:59
Speaker
I think overall people are very we're all consumers at the end of the day and the more upfront information we can have to make an informed decision the better. um um But this would have to be led by legislation in my own
00:01:16
Speaker
personal experience unless people are mandated to do it. Would everybody pay to have a pre-conditioned survey on their property unless they're they're asked to? There's a lot of fees involved when you're when you're moving house. Now, some people may say actually, and people do do it, will provide a report that's available to purchasers. We want to be absolutely transparent because we help think it will help prevent any problems further further down the line. but In Scotland, obviously, it's a statutory instrument to provide a home report. um Again, I think future future governments will pick this up um well whilst they're looking at the whole whole home buying process, whether that's regulation of property agents or or the information that's provided. You're probably aware of material information that agents have to provide at the moment as well. you know Is this the the next iteration that we some level
00:02:13
Speaker
of an inspectional survey. So personally, I can definitely see the benefits. I think there there are issues around the number of trained people to be able to to produce that. Scotland have sort of got that into balance now, but I think we'd definitely have to look at the yeah the amount of trained people to to do that. I looked at some research recently by some corporate firms, but also interested in some lenders that are quite proactive in encouraging people to have um home surveys to protect their
Misconceptions About Mortgage Valuation
00:02:44
Speaker
interest. And the take up, even when people are encouraged to do it, is around one in 10 people actually have a home survey. There's still a misconception that mortgage valuation is a survey. And as we know, it isn't. you know There's a good chance that people may not even have a physical inspection if it goes through an automated valuation model, a drive past report, or or any other other form of valuation. So I think we've still got to dispel that myth that evaluation is a survey.
00:03:11
Speaker
but it's the sort of so what, you know, is it that yeah that that we need to move to a more mandated, get a survey done. There's pros and cons to it. I think the pros probably outweigh the cons, but there's a lot of work for future government to make that common policy in England and Wales. Yeah, I think there's some interesting challenges you've raised there in terms of even Even having the personnel number of surveyors available to to potentially do the number of surveys that would be required, I suppose, because if we're currently saying it's around 10%, 20%, those are those regions that were discussed in the past, it was 20%. Now it's closest to 10%. Do we have enough people to do yeah the other 90% or would never, I suppose, be 100% unless it was mandated?
Benefits of Home Surveys
00:03:57
Speaker
but
00:03:57
Speaker
um Yeah, I think that that other challenge is how do how do you change that long-term perception in the market that evaluation is telling you that um the you know the the the status of the house. And as you say many times, but but no one's turning up, it's an automated one. Yeah, and and that's that's that's to protect the sort of lenders security and the caveat mTOR involved there as well. So I think there there there is an ongoing challenge and something we need to rise up to as a sector to point out that home survey protects your interest. you know There are conflicting people. They can be seen as a blocker in the market. you know I'm realistic to that, but good advice um throughout the property journey. I've heard stories of people being advised to get a home survey on the day of exchange so that they're going to sign. ah if Did you have a survey? Should you have considered, well, when once you fall in love with the property and you're committed,
00:04:54
Speaker
it's very likely that you're going to pause at that point to get a home survey and then reflect on it and potentially have to get further reports. I think there's still an education piece to the general public that a home survey is required and it is to protect their interests. I've got no knowledge of classic cars and if I was ever fortunate enough to buy a DB5, I don't think I'd be buying it without getting specialist advice and that's the probably the best analogy that that I can give. Get a good survey. um you know, protect your interest, provide the advice that you need in order or to provide it um comfort when when you actually turn the key yeah and you live in that particular property. I think, yeah, it's an interesting one. it' you As managing someone, they're walking around a car near the bonnet stop and they're just staring at the engine going, yep, no idea. I need to get some help. Whereas
00:05:41
Speaker
in in in In reverse, someone goes into a house and they knock on some walls and yeah yeah you feel like you know a bit about it then. I suppose in terms in terms of the legislative side, in government and so on, are there are you aware if there's any conversations going on around um potential moves to that model, having seen that rolled
Regulatory Changes in Home Buying Process
00:05:59
Speaker
out in Scotland? or I think it's always sort of on the table that there's lots of threads involved in speeding up the whole process. So the use of data, how the conveyance in model, and
00:06:11
Speaker
can um change what input um surveyors um can add to the process. we're We're represented on quite a few government and task force around the the whole home buying and selling process. And it it's sure to raise to to be raised again, um I would imagine, in in the next parliament, um treating customers fairly, material information, as I say. I think it's it's a cycle and and it will will become more prominent um you know preventing aborted sales, etc. The old issues that we've seen year year upon year, can we tweak that? and Obviously, it will depend on the government that we've got in place next month. Yes, that would be interesting to see the outcome. and if you're it Possibly, this is going
Improving Market Efficiency
00:06:59
Speaker
to get released just after that. It would be interesting to see what the listeners think, depending on
00:07:04
Speaker
on who's in office. fish yeah i think it's um i writes I can see the the appetite for potentially moving towards something like this, having tried with the the hips packs before, because it's One thing, particularly if you if you're on um like a state agent, newsletters and so on, you see the ah continual conversation around how do we improve transaction times and fall through rates at 30% and stuff like this. And I suppose any anything that stops a shock later on, um like upfront information around the quality so yeah ah quality of the house, but the um
00:07:36
Speaker
Yeah, the the risks of the house I suppose is the best way of putting it. um That will reduce fall throughs later and and and also just speed up the transaction time because you're not having to wait for other
Impact of Technology on Residential Sector
00:07:47
Speaker
things to be booked in. Absolutely. and there Are there other ways in which you think the residential sector might change over the coming years? I know there's lots of talks around different technologies and yeah like drones and AI and bits and pieces. do Do you see that changing? Yeah. how itmor are done I think there are
00:08:05
Speaker
lots of potential changes to market. I think we're all aware of climate change and and and the need to to get to net zero and residential is a massive part of that. So retrofit of properties is crucial. How we use properties, the technology as well, you know, in the last five years, there's been significant advances in fault of the take cells, ground source heat pumps, air source heat pumps, ah materials, roofing materials actually generate and energy, um and they will continue to evolve. So our membership really needs to understand the technology and how that interacts with the particular property. We've got new build with future home standards, and then from a practical and surveyor point of view, and how how buildings perform. So putting insulation on the outside of it an older property, does that affect the um
00:09:02
Speaker
moisture and ventilation rates within within the dwelling, could that lead to unintended consequences? So um definitely from that point of view, the way we build properties, modern methods of construction probably haven't taken off as we've seen, but I think government and people that build alternative houses will look look at innovative ways of construction and therefore our members obviously need to appreciate that because when they're built, We need to understand how they perform and if they need to be extended, um how can they be done safely? So yeah, lots of changes. And and again, use of technology. I think ah I've seen reports. I actually got a report on my property because I wanted to ah look at the chimney stacks and the roof coverings and drones. We deployed photograph photographic imagery. but I'm showing my age now, Matt, but when I started, it was a Polaroid.
00:09:57
Speaker
image of the front of the property. and how Some reports can contain hundreds of photographs or why not look at embedded videos. you know It feels like the the industry is on the on the verge of change and innovation and you know probably don't know enough about it at this stage, but AI and all of that really, you know technology of the future. It's definitely got a part to play and it's important we keep up to speed with that. Yeah, definitely. I think um AI is going to be an interesting one. I think there's There's a lot of interesting AI coming through in terms of, we did an episode recently um with Absolar around how they use AI to identify properties that are even worth going to survey in the first place that are you know likely to be suitable for solar versus yeah having to go out and check every single one before you can
AI in Surveying and Marketing
00:10:43
Speaker
progress. so there's There's interesting stuff like that. on the On the flip side, I think there's a lot of AI for AI's sake to try and
00:10:48
Speaker
push it as a marketing type of thing. So it'd be interesting to see what what comes out that's a view. Yeah, yeah. It's very good. Sorry about that. I was going to say the other thing you you said, I think it would be, we yeah we've and I touched on this before actually in the marketing um episode, but around is exactly as you say, putting things like videos in reports. I think gone in the days where it's, do we include photos or not? The photos give a really good um explanation to customers as to what you're looking at where. um And a video just makes that even easier to talk through and understand where something is. Yeah, we all consume information in in different different ways. umm I'm very visual. Some people, you know, audio works for them. Some people like to, not one for me, but like to read a hundred page manual about how to build or repair their lawnmower on more. Let's go and have a look on Google and YouTube and explain it to
Ensuring Accurate Information and Customer Experience
00:11:37
Speaker
me that way. So yeah, there's plenty of opportunities around there. Ultimately, we want to make sure that the customer's getting the correct experience, but the information provided to them is accurate and can be
00:11:46
Speaker
clearly interpreted. So yeah, there's plenty of tools that are being used now and I'm sure we we'll continue to rev evolve as we go forward. Yeah, definitely. I like to think however however you learn, whether it's the manual or the video, you still end up with leftover pieces if you're building an Ikea. Yeah, got it right. Yeah, I've got ah got a shed full of those. yeah Awesome. Well, thank you for covering that. um if If you're interested in what's tuning in for part three, we're going to discuss, I suppose, retrofit and the opportunities that that are coming up there.