At VAS HQ

I ventured up to Middlesbrough to visit the female-led powerhouse behind VAS Valuation Group to discuss how they are raising standards across the industry

Words by BETH FISHER

It’s a frosty Thursday morning in early January when I arrive at VAS’ headquarters—the top floor of Stephenson House in Riverside Park. Next to it is a larger two-storey building it is looking to move into this year.

I am welcomed by compliance and finance director Lisa Southall, who leads me upstairs to meet the team.

Armed with a strong black coffee and my notepad, I set off on my Tour de VAS around the vast, open-plan office to visit each department to chat with each divisional head about the parts they play in the valuation process.

In the detail

I start at the quotes department, which is described to me as “the roots” of the business. Here, head of quotes Lucy Elliot—who has been at the valuation panel manager since 2018—leaves her four screens of enquiries to explain why getting to grips with what the deal and, ultimately, the asset involves right at the start is essential to mitigating valuation issues further down the line.

“When we see the quotation request from the lender or broker, the first thing we do is make sure we’ve got all the information,” she says.

This includes a full property description and covers estimated value, loan type and charge, as some valuers do not operate in P2P or bridging because of their PII restrictions.

Lucy and her team also ask for the applicant’s personal and company name and email upfront to make sure they can collect the valuation fee promptly and avoid delays.

If the property is a development, they will verify if it has any planning permissions as this would influence their choice of valuer for the job.

Telling lenders about issues of which they were not aware happens a fair bit—especially around semi-commercial properties being described as residential.

In one extreme instance, an application noted “residential” but the property turned out to be a lighthouse—an asset type outside of the finance provider’s criteria. This could have wasted a lot of time and fees.

To unpick the enquiries and ensure they each go to the right valuer in the right time frame, Leanne Grange, technical specialist for quotes, is on hand to use their bespoke valuer finder software to find experts in the proposed area based on their mileage, fee, level of PII (and when it runs out) and expertise.

To keep on top of this, she has regular conversations with VAS’s panel of valuers, who often update her on what they can and cannot do.

“This is where a lot of the team’s training and work that Andrew [Murdoch, valuation panel director] and I put in to make sure we choose the right people for the right thing,” Leanne comments.

“I do a training sessions every week, and there are emails that go out every night so the team are aware of certain changes in the background— every day is a training day.”

One interesting point was that many valuation firms do not accept lenders’ reliance wording that is open ended and extends beyond the main address. This shows how the PII market has evolved over the past few years and that VAS certainly has its finger on the pulse of these restrictions, making sure it only approaches the correct valuers for a specific case and avoids wasting time.

Securing the cash

Once the lender or broker for intermediary-led cases instructs the valuation, the case travels to the service department, headed by Danielle Wheater-Rowe.

Put simply, this team obtains the funds for each case by sending out a secure payment link or bank transfer to the payee or, in special circumstances, taking payment over the phone— typically for elderly applicants or those in rural locations who don’t do online banking or have an email address.

“Once we receive the funds, we formally instruct the valuer and send them everything they need to go out and do that inspection,” Danielle explains. This includes any attachments provided by the lender or broker, such as title plans or a schedule of works.

As each lender has its own criteria (such as excluding new-build premiums, not accepting cash values or or requiring different bases of valuations or asking the valuer to make special assumptions) a bespoke form is sent to the valuer to make them aware and ensure a smooth process.

Consequently, the service team has to cross-check every lender’s bespoke requirements to ensure reports come back with everything needed.

A lot of this is now automated. Danielle shares how, in the early days of the business, when its software was not as advanced, they had to do a lot manually. Ultimately, this means that many in the team—such as Danielle who joined three years after the company was launched— know a lot of information off pat.

Glue of the business

I am then introduced to the facilities department, described as the “glue” in the business.

Beth Powell, head of facilities, assists in organising inspection dates, dealing with access issues and oversees the progress of instructions.

Once the valuer has been formally instructed, the division books the inspection date and checks for access issues and any additional information needed from the lender to make the process as straightforward as possible for the valuer.

At the start of every year, its team also carries out a statement of capability of every valuation firm to make sure they are up to date.

“It’s a really long-winded process,” reflects Beth—who had started it the week before I arrived. Out of 200 firms on the panel, she has 50 that need amending.

Compliance

Next, I meet assistant head of compliance Jess Sleeman, who has been with the business from the start.

She explains that if valuers need any information between the inspection and when the report is due to arrive—such as on tenancy agreements or clarity on the address—the compliance team will be the go-between with them and the lender to obtain the answers to avoid delays.

In short, they manage the valuer and will chase them to get the reports in on schedule. I am told that VAS has implemented a new “quick update” system so that if a report is delayed, the team can add a note to inform lenders of progress and the date when they expect it to arrive. “Communication is key to everything we do,” Jess explains.

Once the information is in, they review it. If it isn’t flagged as needing an indepth, external audit (for example, if it’s a high-value or quirky property or if it’s being conducted by a particular valuer)—and send it to the lender.

Quality control

Stephen Todd, co-founder and chief commercial officer at VAS Group, explains that quality control is critical to making sure good quality and robust valuation reports are sent to clients, and uses this information to effectively manage its extensive panel of firms.

David Hughes, a non-executive director, has been instrumental in creating the quality control process at VAS. The compliance team works with 15 diverse auditors located across the country—plus one now based in Thailand—who it uses to provide this quality control process.

“A lot of our auditors are former heads or partners at Cushman & Wakefield, JLL and Aviva, so we’re really privileged to have top-calibre people,” says David. “We’ve got seasoned campaigners [from] national, regional and local valuation firms,” he adds, which covers the entire scope of what VAS does.

While valuers like to use their own style of reports, lenders want a level of uniformity, so each report has a VAS Panel executive summary at the beginning. This includes the key components of the valuation report, including some photographs, what the values are, the summary of the diligence, and the main actions and risks for lenders.

“It also gives the lender a bit more guidance about what the local market trends are doing, such as whether supply and demand are increasing or decreasing values,” David states.

David shows me a typical report and how an auditor would go through it. He states that all reports go through a basic checking process internally and they follow a RAG—red, amber, green— rating system to determine if the report needs reviewing by one of its auditors. This covers many areas such as valuation methodology, comparables used to support the valuation provided, making sure lenders’ instructions are adhered to, plus checking further due diligence matters such as asbestos, environmental risks, flood risk and invasive species, to EPCs and planning, have all been considered by the valuer appropriately.

“The quality varies across our valuers,” he admits. “We’ve got some great valuers who repeatedly give us really good quality reports. There are some firms that are a bit temperamental, and there are others who we’ve got to work with a bit more intensely to make sure the reports are up to standard before being released to our customers.”

Additionally, the business uses an internal quality control system for valuation firms, based on reviews and reports that have been submitted previously, and internal auditor feedback. This is another layer that has been created with a total emphasis on quality.

“On occasion, you get some firms who are broadly good but, for whatever reason, they struggle with a single asset class, for example HMOs,” David expands. “The upshot is we work closely with them all so any issue is addressed openly and promptly”.

However, it is unlikely to see any valuers on panel that give consistently low quality reports, because they are removed— up to 30 over the past five years.

For reports that are flagged green, the compliance team will carry out their 12-point check and a sense check and, unless anything needs to be raised with the valuer, it will go to the lender quickly.

Jeremy Handley, a strategic adviser on the VAS board who used to head the UK valuation team at JLL, built VAS’s complex valuation Excel auditing form, aptly called Audit Control, to understand the level of auditing every single report requires. It uses a series of triggers to identify whether a report needs to checked internally by the compliance team or sent to one of the company’s expert auditors. For example, reports that highlight a potential red concern, those that involve risky development assets, or are at high LTVs are automatically directed externally.

Ultimately, a lot of thought and investment has gone into how VAS controls risk—something lenders will be thinking about even more than usual considering the economic climate we find ourselves in.

“We’re not contracted with our clients to do this high level of quality control, but we choose to do it,” states Stephen. “It cost us a lot of money to do this, but it’s the only way we can control the quality of reporting and make sure we have the availability of valuers and the range that we need for every sector across the country, while protecting our clients at the same time.”

Management hub

Assembled in the middle of the openplan office is the management hub, led by commercial director Louise Chapman and operations director Natalie Benson, through which all cases are fed.

This team usually becomes involved when there are idiosyncratic elements involved, or if there are any issues.

“This team reviews every single postvaluation query (PVQ) that comes in and out, and we have SLAs in place with both valuers and clients to return a response within 24 hours,” says Louise, who will check answers to reports or questions to ensure they are answered properly, and package them up to lenders and speak directly with them to avoid any back and forth over email and any subsequent frustration.

“We get in the mix and help move things forward,” Louise adds. Sometimes, things can just get lost in translation. “We just smooth it all out, put people in touch, and get the updates as quickly and easily as possible,” says Natalie.

The team will also check that all information and anything that has transpired since the report was drawn up have been examined by the valuer.

“Occasionally, we’ve had cases where there was a comparable provided, but it wasn’t available on the comparables website at the time of doing the valuation—it went on a day or two after,” Louise says. “Once they’d taken that into consideration, [the report] slightly changed. So that’s something that we can review.”

Their question is whether something is apposite: “Is it justified that a client wants a valuer to add an extra piece of land or property within a development in London, with a really high GDV, because the customer missed it at quote stage, for free? No. So we’ve got to go back and say no. That’s how we train, because you’ll be surprised by what comes through,” Louise shares. “It goes the other way too; we work hard with valuers to find solutions for lenders that are entirely reasonable to request.”

I ask in what scenario a conversation could go south and they have to step in, and am given an example of a lender’s underwriter asking a valuer to do something that is out of their remit.

“There’s something we’ve noticed in the industry at the moment—we don’t know if it’s because of Covid, [but there has been the] recruitment of fresh underwriters who possibly weren’t working in the industry [before],” Louise highlights.

This lack of knowledge has resulted in VAS running training days and roadshows where they talk about industry myths and what sits outside a valuer’s remit. These include Q&As with lenders’ teams and advice on how they can work better with VAS.

“It’s more about giving back to the industry and our clients,” Louise comments. “We’re looking at doing lender and broker educational podcasts this year, which we feel be really good for our broker partners.”

The lender training days seem to be working: “It makes it so much easier because people afterwards know they can pick up the phone [to us] and things can be sorted, rather than sending multiple e-mails on one subject,” says Natalie.

Problem solving

Andrew, who is an LPA receiver, chartered surveyor and former head of valuations at specialist lender Together, understands the end-to-end journey of a valuation. He has seen what happens when it goes pear shaped at lenders and what action they take when it comes to enforcement.

“I understand what lenders want and need, and I also understand it from the valuer’s perspective in terms of what they can give and what they’re prepared to give,” he says. “Quite often, my role gets embroiled in some sort of problem solving.”

He often works alongside Louise and Natalie when there are difficult situations or a debate between a valuer and a lender: “A lot of what I do is help the teams to unpick sticky situations and move them forward.”

In addition, a large part of Andrew’s role is managing the valuation panel—which is now in excess of 200 firms of all shapes and sizes.

When looking to onboard new valuation firms, VAS will do due diligence on them get to understand their practice to see if it will make a good addition and fit to the panel. From there, they then go into the granular detail of what and where that valuer will—and can competently—cover.

“From my point of view, we only want to be approaching firms for the type of work they want to be doing and what they’re good at and have expertise in,” says Andrew. “There’s no point in us bombarding a firm with load of quotes for the types of valuations they don’t want to be doing. It wastes our and their time and doesn’t do the relationship any good.”

Building relationships with the key people at these businesses is critical, he says: “When a lender rings up and needs a valuation urgently in Scotland, for example, we’ll sort it out, as we know the key people to go to who will help.”

He also highlights the amount of fee income that VAS offers and which gives the company some leverage with these firms: “They are willing to help us because we’re a large part of their business. We’re a big client to them. A number of our lenders might have given them only a small portion of work but, as a whole business, we’ve given them a significant chunk of their valuation fee income. So it works really well.”

The group has also trialled something called QC+ to a selection of its lender clients—for any cases over £5m. This is basically giving an additional audit to the lender alongside the valuation report to highlight some key issues of which they should be aware within the valuation report, providing a supportive tool to an underwriter to help protect them.

Later this year, VAS hopes to take it to the wider market. “I think that gives lenders—especially the smaller bridging providers—the comfort that, on deals over £5m, it’s been looked at [and we have flagged things, such as] the tenancies are expiring next year or that there’s only three months left of your planning permission. You’ve really got to make sure you satisfy these things before you lend,” says Stephen.

Mainly women

During my afternoon tour, I have become aware of how many women are at the company and leading their departments. Out of a total team of 39, women make up 87% of VAS’ workforce and 63% of its senior management team.

I ask Louise and Natalie why they think women are drawn to their business in a sector that is predominantly male.

I am told that when the company interviews for new candidates, it looks at people it can train who already have passion, care, the ability to learn and a personality that gels with the team—they are not necessarily already inside the industry. Its ethos is to employ based on ability, resulting in a varied workforce covering a mix of people from minority backgrounds and members of the LGBTQ community.

I am surprised to find they have found new team members simply based on their positive attitudes and exemplary service they have offered in outside roles, such as those they have met in supermarkets and at their local Nando’s.

Louise gives me an example of their general manager who previously worked in senior management at B&Q. The way she had handled a complaint from the chief operating officer and co-founder Gina May “blew them away”—so they offered her an interview.

The business offers one-to-one coaching and continuous on-the-job training, in addition to a Litmos training portal which has access to 2000-plus courses, and the team are asked to do a minimum of 70 of them. While some are business courses, others are selfdevelopment—for instance, VAS recently rolled out the Middlesbrough College link for free online learning courses.

Recently, the head of departments and some specialists have completed the Leading Smarter course, and the training company have provided details of a new Customer Service course that VAS is looking to implement.

This different outlook on recruitment and training doesn’t just attract candidates, either. The business has high retention—it has only lost five employees in five years.

“With this company, if you’re willing to put in the work, the opportunities are endless for you—and I think that’s why the team enjoy working here,” states Louise. “We’ve had some bespoke roles made because we’ll work with people’s strengths.”

“Empowering women is something I’m passionate about it,” adds Louise, who is also a single mother. “It’s important to say you can have a family and a career—it’s about work-life balance and organising yourself. We’re amazing.” a glimpse into our ever-busy schedule

Now, with a team of 40, VAS plans to continue to build on the positive culture within the business over the next 12 months as it looks to grow, launch its new website and take over the larger office next door.

With the group now regularly completing over 1,000 valuations per month for the short- and long-term as well as challenger bank lending spaces, and having valued over £8bn worth of commercial, semi-commercial and residential property in 2022, I can only expect big things to come this year.