Episode 31 – Part 2 – What is the potential shape of residential surveying in the future? With Steve Lees

The following transcript is autogenerated so may contain errors.

 Matt Nally: In part two of this episode with Steve Lees from the RICS, we’re looking at the sort of the future of the residential market and what the model might be. 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 to get your thoughts. Obviously, this isn’t to do with the home survey future specifically in terms of the review that’s coming up. But what do you think the future of the residential side of the process is? Is it? Is it looking to move to a Scottish model, you know, with the home report side of things?

Steve Lees: Yeah, really interesting. I think obviously home information packs were looked at in the early to late 2000s, obviously 2010. The proposal that 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’re doing.

And is that a potential way forward? I think overall, people 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. But this would have to be led by legislation. In my own personal experience, unless people are mandated to do it, would everybody, pay to have a pre condition survey on their property, unless they’re asked to.

There’s a lot of fees involved when you’re moving house. Now, some people may say actually, and people do it, we’ll provide a report that’s available to purchasers. We want to be absolutely transparent because we help, we think it will help prevent any problems. problems further down the line.

But in Scotland, obviously, it’s a statutory instrument to provide a home report. Again, I think future, future governments will pick this up. Whilst they’re looking at the whole home buying process, whether that’s regulation of property agents 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 next iteration that would be some level of inspection or survey? Personally, I can definitely see the benefits. I think there are issues around. The number of trained people to be able to produce that Scotland have sort of got that into balance now, but I think we definitely have to look at the the amount of trained people to do that.

I looked at some research recently by some corporate firms, but also interested some lenders are quite proactive in encouraging people to have home surveys to protect their 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 a 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 any other Other form of valuation. So I think we’ve still gotta dispel that myth, that valuation is a survey, but it’s the sort of, so what you know, is it that, yeah 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 balance in England and Wales. 

Matt Nally: Yeah, I think it’s there’s yeah, some interesting challenges you’ve raised there in terms of even having the personnel.

Yeah. Number of surveys available to, to potentially do the number of surveys that would be required, because if we’re currently saying it’s around 10%, 20% you know, those are those regions that were discussed in the past. It was 20 percent now it’s close to 10. If we do, we have enough people to do the other 90 percent or whenever, I suppose it’d be a hundred percent unless it was mandated, but yeah, I think that other challenge is how do you change that long term perception in the market that evaluation is telling you the you know, the status of the house.

And as you say, many times, but no one’s turning up. It’s an automated. Yeah, 

Steve Lees: and that’s to protect the sort of lender’s security. And there’s a caveat MTOR involved there as well. So I think 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. 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. Did you have a survey?

Should you have considered? Once you fall in love with the property and you’re committed, 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. So I think there’s still an education piece to the general public that a home survey.

is required. It is to protect their interest. You know, I’ve got no knowledge of classic cars, and if I was ever fortunate enough to buy a DB five, I don’t think I’ll be buying it without getting specialist advice. And that’s the probably the best analogy that I can give. Get a good survey. You know, protect your interest, provide the advice that you need in order to provide it.

Comfort when you actually turn the key in you and you live in that particular property. I 

Matt Nally: think, 

Steve Lees: yeah, it’s an interesting one. It’s 

Matt Nally: You, I was imagining someone they’re walking around a car near the bonnets up and they’re just staring at the engine going, yep, no idea. I need to get some help.

Whereas in, in reverse, someone goes into a house and they knock on some walls and yeah, you feel like, you know, a bit about it. I suppose in terms of the legislatory side. you know, in government and so on. Are there, are you aware if there’s any conversations going on around potential moves to that model having seen that rolled out in Scotland?

Steve Lees: I think it’s always sort of on the table, there’s lots of threads involved in speeding up the whole process, so the use of data, how the conveyancing model can change, what input surveyors can add to the process. We’re represented on quite a few government Task force around the whole home buying and selling process, and it’s sure to raise.

To be raised again. I would imagine in the next parliament treating customers fairly material information, as I say, I think it’s a cycle and it will become more prominent, you know, preventing aborted sales, etc. The old issues that we’ve seen year upon year. Can we tweak that? Obviously, it will depend on the government that we’ve got in place next month.

Matt Nally: Yeah. Yeah. That’d be interesting to see the outcome. And if you’re possibly, this is going to get released just after that. So you might know 

Steve Lees: the outcome. Okay. Yeah. It’d be interesting to see what the listeners think depending on on who’s in office. Yeah. 

Matt Nally: I think it’s you’re right. I can see the appetite for potentially moving towards something like this, having, you know, tried with the HIPPS packs before, because it’s one thing, particularly if you’re on yeah.

Like a state agent newsletters and so on, you see the continual conversation around how do we improve transaction times and fall through rates at 30 percent and stuff like this. And I suppose any, anything that stops a shock later on like upfront information around the quality, the sort of, you know, not quality of the house, but the you know, the risks of the house, I suppose is the best way of putting it.

That will reduce fall throughs later. And and also just speed up the transaction time because you’re not having to wait for other things to be booked in. Absolutely. 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, you know, like drones and AI and bits and pieces.

Do you see that changing how reports are done? 

Steve Lees: I think there are lots of potential changes to market. We’re all aware of climate change and the need to get to net zero, and residential is a massive part of that. 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 photovoltaic cells, ground source heat pumps, air source heat pumps materials, roofing materials that actually generate heat.

And they will continue to evolve. So our membership really need 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 surveyory point of view how buildings perform. You know, putting insulation on the outside of an older property.

Does that affect the moisture and ventilation rates within the dwelling? Could that lead to unintended consequences? Definitely from that point of view, the way we build properties, modern methods of construction probably haven’t taken off as we’ve seen. You know, I think government and people that, Build alternative houses will 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 if they need to be extended.

How can they be done? be done safely. Yeah, lots of changes. And again, use of technology. I think I’ve seen reports. I actually got a report on my property because I wanted to look at the chimney stacks and the roof coverings and drones were deployed photograph, photographic imagery. I’m showing my age now, Matt, but when I started, it was a Polaroid.

Image of the front of the property, you know, some reports can contain hundreds of photographs or why not look at embedded videos, you know, it feels like the industry is 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, definitely got a part to play and it’s important we keep up to speed with that.

Matt Nally: Yeah, definitely. I think AI is going to be an interesting one. I think there’s a lot of interesting AI coming through in We did an episode recently without solar around how they use AI to identify properties that are even worth going to survey in the first place that are likely to be suitable for solar versus, you know, having to go out and check every single one before you can progress.

So there’s interesting stuff like that on the flip side. I think there’s a lot of AI for AI sake to try and push it as a marketing. Type of things. It’d be interesting to see what comes out that’s of use. Yeah. 

Steve Lees: It’s very good. Sorry 

Matt Nally: about that. I was about to say the other thing you said, I think it would be, you know, we’ve, and I touched on this before actually in the marketing episode, but around is exactly as you say, putting things like videos in reports, you know, I think gone are the days where it’s, you know, do we include photos or not?

The photos give a really good explanation to customers as to what you’re looking at, where. And a video just makes that even easier to talk through and understand where something is. consume information 

Steve Lees: In different ways. I’m very visual. Some people, you know, audio works 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 me that way.

So yeah, there’s plenty of opportunities around there. Ultimately, we want to make sure that the customers get in. The correct experience, but the information provided to them is accurate and can be clearly interpreted. So yeah, there’s plenty of tools that are being used now and I’m sure we’ll continue to evolve as we go forward.

Matt Nally: Yeah, definitely. I like to think however you learn, whether it’s the manual or the video, you still end up with leftover pieces if you’re building an IKEA. 

Steve Lees: Yeah, I’ve got a, I’ve got a shed full of those. 

Matt Nally: Awesome. Thank you for covering that. If you’re interested in what to tune in for part three, we’re going to discuss I suppose retrofit and the opportunities that are coming up.