Good news on house prices is certainly positive, but we must remember that this is only an average and one that gives us just the national picture. The reality is that at a regional or local level, there can still be a real discrepancy with that national perspective, with price changes far behind this in some cases.

The same data from the ONS shows that compared to the national average of 1.5% growth between July and August, the South West saw a monthly fall of -0.3%. Drilling down further, a report earlier in the year by Open Property Group found that 48% of the local authority districts it analysed had seen prices fall since the same time last year.

While this may create opportunities for savvy investors, it creates a real challenge for lenders and funders in understanding value, as well as any potential risks in their mortgage book. Rather than a bird’s-eye view, firms need robust intelligence to understand and account for these regional variations to ultimately make informed decisions.

Given the size of the mortgage book many lenders are working with, it’s no surprise that technology is helping to streamline the gathering of such intelligence. Automated valuation models (AVMs) are perhaps the best example, using real-time market data and algorithms to produce bulk valuations. While this is certainly efficient and hugely valuable, it shouldn’t be the only tool a lender uses.

After all, a regional or even local discrepancy in value can be amplified if the property is in poor condition. With arrears cases increasing, lenders need a full picture to be able to act early and ensure a positive outcome for all. It’s therefore essential that the lender gets eyes on the asset to assess its condition and any potential risks – and the best way to do so is through drive by valuations.

These can be completed discretely without the occupier’s knowledge or involvement and provide an assessment of the property’s condition, including any apparent or potential defects. The inspection will also look at the surrounding properties, as well as the local area in general, gathering any useable intelligence to help inform the lender.

Using the information gathered, along with market intelligence and comparable data, the end result is a valuation and a projected market value. This is the figure an asset manager would expect to achieve within a 90-day marketing period. By having eyes on the property itself, it proves far more accurate than either an AVM or desktop valuation. Plus, they can be completed as frequently as the lender requires or their appetite to risk allows.

With this information at their disposal, a lender has the necessary oversight to assess their portfolio at a national, regional or even property level and exercise good caution and governance. The opportunity is there to segment the book and look for trends that can be built into their wider business strategies.

There’s no doubt that this is an onerous task, but given the huge upside of having this intelligence, it is absolutely necessary.

David Miller is divisional director at Spicerhaart Corporate Sales