Property valuation has always been at the heart of the housing and lending market. Whether you’re a buyer, seller, broker, lender or investor, understanding what a property is truly worth is essential. Traditionally, valuations have been the domain of professional surveyors - who are highly trained individuals who conduct physical inspections and apply their judgment and experience to produce an accurate figure.

But in the digital era, a new tool has gained traction: the Automated Valuation Model (AVM). These systems use advanced algorithms, machine learning, and large datasets to generate property valuations at scale and speed. While AVMs cannot entirely replace human expertise, they are reshaping how the market approaches valuation.

This article explores what AVMs are, their strengths and limitations, and how they can coexist with traditional in-person appraisals. We’ll also look at their use cases across lending, risk management and fraud detection and consider what the future might hold.

What is an Automated Valuation Model (AVM)?

At its core, an AVM is a computer-based system designed to estimate the value of a property by analysing multiple data inputs. Unlike a surveyor who visits a home, an AVM relies on:

  • Historical sales data
  • Property attributes (size, bedrooms, bathrooms, energy efficiency features, garage, garden, solar panels, etc.)
  • Neighbourhood information (crime rates, schools, transport links, green space, amenities)
  • Market trends (supply, demand, and macro-economic factors)
  • Comparable properties nearby

In effect, an AVM mirrors what a surveyor would consider but does it using algorithms and huge datasets. A model might compare thousands of similar homes across a postcode area, weighting recent transactions more heavily, before generating a predicted market value.

According to the Royal Institution of Chartered Surveyors (RICS), AVMs are becoming more prominent in the UK mortgage market, particularly for low-risk lending scenarios where speed and efficiency matter most.

Why AVMs Are Gaining Ground

1. Speed and Efficiency

A traditional valuation often requires:

  • Booking a visit
  • Physical inspection
  • Report preparation
  • Possible follow-up queries

This can take days or sometimes even weeks. By contrast, an AVM can produce an estimate in seconds. For lenders making thousands of mortgage decisions every month, this time saving is invaluable.

Consider portfolio revaluations: when banks or investment funds need to update the value of thousands of properties in their loan book, using only surveyors would be impractical. AVMs can process this data in bulk, giving a snapshot of current exposure almost instantly.

2. Cost Reduction

Surveyors don’t come cheap. Costs include inspection fees, travel, report preparation, and sometimes additional structural assessments. By comparison, AVMs require no site visits and can be scaled across thousands of cases.

This makes AVMs particularly appealing for low-risk mortgage valuations, where the probability of mis-pricing is low. The cost savings for lenders are substantial and some of those efficiencies can even be passed on to borrowers.

3. Scalability

Traditional appraisals are inherently limited: one surveyor can only visit so many properties in a day. AVMs, however, can generate valuations across entire regions or even entire countries, simultaneously.

For government bodies, regulators, or institutions managing vast portfolios, scalability is one of the most compelling benefits of AVMs.

4. Consistency and Objectivity

Human surveyors, however skilled, may have subjective biases. Two different valuers might give slightly different figures for the same property, depending on their judgment and interpretation.

AVMs, by contrast, apply the same rules consistently across all properties. This standardisation helps reduce variation and ensures that valuations are not swayed by human error, fatigue or external influence.

5. Fraud Detection and Anomaly Identification

AVMs excel at identifying outliers. For instance:

  • A property listed far above comparable homes nearby.
  • Sales data inconsistent with current market conditions.
  • Discrepancies in square footage, attributes, or pricing history.

By flagging these anomalies, AVMs act as a first line of defence against fraud, human error, or misrepresentation. This makes them not only valuation tools but also critical components of risk management.

AVMs vs Traditional Valuations: Competition or Collaboration?

The discussion surrounding Automated Valuation Models (AVMs) often frames the technology as a potential replacement for traditional surveyors. In reality, the future of property valuation is far more likely to be collaborative rather than competitive. AVMs and in-person valuations each have unique strengths, and the most effective strategy combines both approaches to maximise efficiency, accuracy and regulatory compliance.

Hybrid Approaches:

A growing number of lenders and property professionals are adopting hybrid valuation strategies, which allow AVMs and traditional valuations to complement one another rather than compete. Key approaches include:

Initial Screening with AVMs
AVMs excel at generating quick, cost-effective valuations for standard or lower-risk properties. By processing large datasets in seconds, AVMs can:This allows lenders to prioritise surveyor resources on cases where they are most needed, rather than conducting time-intensive inspections on every property.

Escalation Model
In situations where the AVM flags anomalies, unique property characteristics or discrepancies in the data, a surveyor can step in to conduct an in-depth assessment. For example:By using AVMs to flag these cases, lenders can ensure that human expertise is applied strategically, focusing on complex properties that require nuanced judgment.

Dual Checks for Risk Mitigation
Some lenders adopt a dual-check system, where an AVM valuation is generated alongside a traditional in-person appraisal. This approach:For high-volume mortgage portfolios, dual checks provide peace of mind, ensuring that each valuation is supported both by data-driven insights and professional judgment.

Practical Example: A Layered Valuation Strategy

Consider a mid-sized lender with a portfolio of 5,000 residential mortgage applications per month:

  1. Step 1 – AVM Screening: All applications receive an initial AVM valuation within seconds, highlighting standard properties and potential outliers.
  2. Step 2 – Surveyor Review: Only unusual, high-risk, or flagged properties are assigned to surveyors for in-person inspection.
  3. Step 3 – Dual Check (Optional): For higher-value or regulatory-sensitive cases, the AVM and surveyor valuations are compared, discrepancies investigated and a final value assigned.

This approach results in faster turnaround times, reduced operational costs and improved accuracy across the lender’s portfolio.

Recent Insights: AVMs vs. Traditional Valuations

Estate Agents' Perspectives on AVMs

A recent survey conducted by estate agency platform Alto revealed that approximately 87% of UK estate agents believe AVMs consistently undervalue properties, particularly in northern regions, rural areas, and lower-income communities. Despite these concerns, 78% of agents continue to rely on AVMs for determining listing prices, with 23% using them for every valuation. This reliance persists even though 73% of agents admit they don't fully trust the results, highlighting a tension between technological efficiency and professional judgment. MPA Magazine

Agents have pointed out that AVMs often fail to account for key value-enhancing factors such as renovations, unique features, property condition, and local market dynamics. Overlooking aspects like noise levels, crime rates, economic conditions, and additions such as extensions and smart technology can lead to significant discrepancies in property valuations. As a result, sellers may unknowingly lose substantial amounts, with some agents in the North East adjusting AI-based prices by £20,000 or more. The Sun


As technology continues to reshape the property market, the evolution of valuation methods is clear. Automated Valuation Models (AVMs) provide speed, scalability, and data-driven insights, while traditional appraisals offer human expertise, contextual understanding, and regulatory compliance. The most effective approach is not choosing one over the other, but combining their strengths.

AVMs enable rapid assessments and highlight potential anomalies, allowing surveyors to focus their expertise on complex, unique, or high-value properties. This integration enhances operational efficiency, improves risk management, and ensures valuations are both accurate and reliable. By pairing the analytical power of AVMs with the nuanced insight of professional surveyors, the real estate industry can adapt to changing market conditions while maintaining trust and credibility.

Ultimately, the future of property valuation is about integration rather than replacement. A hybrid approach allows lenders, investors, and property professionals to make confident, well-informed decisions, ensuring that valuations remain responsive, thorough, and fit for the demands of an increasingly dynamic property market.