Mortgage lenders creaming off 'secret profits' from surveyors, claim

Mortgage lenders creaming off 'secret profits' from surveyors, claim

Lenders and mortgage brokers are creaming off ‘secret profits’ from surveyors carrying out mortgage valuations, it has been claimed.

It is also alleged that with experienced, fully qualified surveyors reluctant to accept increasingly low fees, lenders are using those with less experience and fewer qualifications.

The claims come as concerns continue to grow over a shortage of surveyors, leading to hold-ups in house sales which agents are reporting are putting weeks on to normal transaction times.

The RICS has announced Dr Oonagh McDonald as chair of an independent commission looking into the issue.

The former MP will head the commission, which is calling for written evidence by September 30.

It has already received views made known on the RICS LinkedIn forum, where a number of surveyors have aired their anger and disquiet.

The most explosive claims come from Lesley J Long FRICS, who says that surveyors are having to accept progressively reduced fees, and that in practice, the lender or mortgage broker make ‘secret profits’.

This, he says, is because mortgage applicants hand over to the lender or mortgage a ‘substantial sum’ for admin and valuation costs.

Long says that “a large proportion of that total is retained by the lender/ intermediary, being in practice an addition to its profit but actually being a secret profit.

“The latter is generally deemed repugnant in law and often actually unlawful. This may indeed amount to a fraud.”

He goes on to say that the applicant is unaware of this, and assumes that the surveyor who is carrying out the work is on high earnings.

Long also alleges that in the face of growing resistance from fully qualified RICS members to accept low fees, lenders are accepting lower qualifications and are allowing an Assoc RICS to carry out mortgage and survey work.

“Lower skills and experience reduce standards and will lead to yet more insurance claims,” says Long in his submission.

“The RICS are aiding and abetting this process by allowing persons with minimal learning, limited professional knowledge, and with hardly any experience to attain an Assoc RICS suffix to his/her name.”

He concludes: “Those of us who have worked for many years to achieve their qualification and have then amassed years of experience look on in horror.

“Our voices as RICS members have been ignored for years and we become progressively disillusioned with our professional body.”