Leeds Building Society speeds up mortgage journeys using Hometrack’s digital risk decisioning platform

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Mortgage lenders must change and adapt at an increasing pace not only to continue serving their customers well but to compete with ever more capable peers and manage cost.

Seizing the opportunity to speed up and improve the mortgage journey using the most up to date property risk data, Leeds Building Society has integrated with Hometrack’s digital platform Property Risk Hub and enhanced its use of automated valuations with the addition of Digital Valuer. 

Building on its suite of automation models, Leeds has also become the first lender in the UK to adopt Hometrack’s live EPC data solution at origination, complementing its use of flood and subsidence data.  

“Our objective when deciding to integrate with Hometrack’s hub was to make faster, more accurate underwriting decisions,” said Andy Mellor, Chief Risk Officer, Leeds Building Society. “Being faster benefits the broker/customer and the more accurate we are from a risk perspective, by having more relevant data, the better our underwriting decisions are.”

Property Risk Hub explained

Property Risk Hub is a one-stop software, data and decisioning platform that integrates fully into a lender’s operating system, underpinning the entire mortgage journey from DIP to completion.

It brings together automated modules such as Hometrack’s AVM and Digital Valuer to deliver real-time valuations as well as trusted data sources on climate risks in order to streamline the property risk process within a safe risk management framework. 

“Property Risk Hub is a step change for lenders,” said George Robbins, VP Commercial for Hometrack, “bringing real-time data, analytics and logic to a process that has traditionally been heavily manual, repetitive and often broken into long phases of waiting for the consumer. This doesn’t work for the consumer or the lender, so accelerating decisions with accurate, appropriate risk decisions is key.” 

Ease of integration

Lenders can access data from multiple sources through a single integration. The simplicity offered by the hub was a major draw for Leeds. 

“The world of big data is, well, a big one,” explained Andy. “One of the challenges that poses is, if you’re not careful, you’ll end up with 20 contracts from 20 different data providers just to underwrite one mortgage. You quickly have an unmanageable ecosystem on your hands.

“The question we had been trying to answer was, how can we get as much data as possible down the existing pipes? Now that we already have the plumbing set up, we can pull back whatever data we want from Hometrack and its data partners straight into our systems without any IT engagement.”

Enhancing digital valuations 

Digital Valuer is one of the automated modules Leeds has chosen to use within Property Risk Hub.

As the next generation in automated valuations, Digital Valuer fulfils the more difficult cases not accessible to traditional AVMs; driving increased automation, lower costs and increased digital journeys. 

Hometrack forecasts that by using Digital Valuer one in 3 homebuyers who are currently referred for a physical valuation will be eligible for an automated mortgage decision that takes seconds instead of weeks.

Leeds says following the adoption of Digital Valuer, the percentage of automated valuations it can complete is likely to increase to over 30%. 

This gives the mutual the opportunity to save significant amounts each year by not instructing a surveyor to visit the property. For homeowners who can benefit from an automated valuation, they face a wait time of seconds versus up to six days for the valuation, says Leeds.

“When Hometrack launched Digital Valuer, it was a simple decision for Leeds to take on board the new service because why wouldn’t you want access to more data about the property, delivered digitally?” said Andy.

“If the application fails the AVM, by using Digital Valuer, there’s even more data available to inform our decision about whether or not to instruct a physical valuation or if there’s enough information for us to be satisfied with an automated survey. It means we’re able to get more cases through the system without slowing down the lending process.”

Digital Valuer is configured to take account of each lender’s own lending rules driving increased accuracy, lower loss rates and early identification of cases that cannot proceed regardless of valuation.

Lenders will be able to deliver quicker decisions to their borrowers at a lower cost on a third of the applications that are currently seen by a surveyor.

Through the combined use of the Property Risk Hub and Digital Valuer,  data can be enhanced with the most important and evolving property risk factors including climate change, energy performance requirements and valuation criteria, further reducing effort, time and post valuation queries.

Recognising climate change challenges

“The single biggest advantage of Property Risk Hub,” said Andy,” is that it doesn’t matter what service we take from Hometrack, live EPC ratings, flood or ground erosion data, it all comes through the same connection.”

Leeds is the first lender to adopt Hometrack’s Live EPC data solution, accessed through the hub. 

Andy continued: “Having access to the most up to date EPC data means we can check whether we’re making the right decision for Leeds and for customers at origination and we can continue to set or change our lending policy accordingly.”

Climate change is a reality and, with homes contributing between 17% to 21% towards global emissions and energy prices soaring in recent times, energy efficiency is becoming a key concern for consumers and lenders.

Hometrack is making energy performance data available to lenders in real time to meet regulatory requirements in areas such as buy-to-let and to inform lenders and consumers of the impact of the home’s EPC rating. 

Leeds has led the market in adopting Hometrack’s Live EPC data solution, instead of using government batch data, to inform its climate change risk management strategy. 

The solution, said the mutual, has allowed it to add extra controls to support the strategy without adding time to the mortgage journey.

Samantha Partington 16 August 2023
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