A mortgage valuation survey is a brief report carried out by a qualified surveyor to inspect the property you’re looking to buy.
It’s specific to the property you’re looking to buy and gives the lender confirmation of the property’s current value, also taking into consideration recently sold prices of similar properties in the same area. It’ll also take into consideration any defects which may affect the property’s value. The lender needs to ensure they are not taking any risks lending on a property that may have structural issues or are above a shop/restaurant or in a state of neglect. The valuation is commissioned by the lender and paid for by you and is simply about confirming the value of the property. This is important to understand because it is unlikely that you will ever get a copy of it because the RICS surveyor is working for the lender, not you.
What’s involved in a mortgage valuation?
The objective of the valuation is to confirm the amount offered by you is a fair market value for the property; the bank wants to ensure that if they need to repossess the property, that they can sell it again quickly on the open market and be able to clear their mortgage charge. A mortgage valuation flags certain defects within a property that the Surveyor feels could affect the property’s value, however it is not a detailed defect report.
What do they look for?
As mentioned, the mortgage valuation in not an in-depth report. It’ll be 2-3 pages maximum. When you make an application for a mortgage the mortgage lender usually wants to know the answer to 2 main questions:
Is the house worth the price you’re paying for it?
Is the house going to fall down any time soon?
Let’s quickly look at each of these two questions in a bit more detail.
Is the house worth the price you are paying for it?
From a lenders point of view, they purely need to know that they aren’t lending someone £150,000 for a house that’s only worth £80,000. If they ever have to repossess the property, they want to be sure they will get as much of their money back as possible. That’s the most straight-forward explanation but there are other factors to take into consideration like loan to value (LTV). They just want to know that the valuation you or the buyer has placed on the property is a true reflection of the property’s current value. To confirm this, they will look at the overall condition of the property, whether it has been has any renovations carried out or requires modernisation and whether the number of bedrooms declared is accurate considering building regulations. They will also be looking at comparables of similar houses that have recently sold in the area.
Is the house going to fall down anytime soon?
A mortgage valuation survey will check for obvious sign of structural damage, damp, problems with the roof, problems with wiring etc. however no floor coverings will be lifted and no readings will be taken. If any potential issues are obvious, the surveyor may recommend that a more detailed report (a specialist damp and timber report for example) be obtained by the mortgage company before approving the mortgage.
How much does a mortgage valuation cost?
Generally, you will pay for the lender’s survey. The cost is based on the value and size of the property you are looking to purchase and costs typically £150 to £1,500.
Andrew MacKenzie is a qualified Chartered Surveyor with over 20 years’ experience within the Scottish Property market. He specialises in all types of residential valuations including Home Reports, Private Valuation reports and Development Appraisals.
Excellent service from the initial contact.The survey was carried out without fuss or issues and report issued promptly.I would certainly recommend the home report company.
06:38 24 Jun 22
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08:37 10 Jun 22
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11:18 20 May 22
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11:52 16 May 22
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23:35 08 May 22
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18:27 06 May 22
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18:51 02 May 22
I have used this company for a fourth time now for Home Reports, for myself and family, and on every occasion have found the service they provide to be second to none.Each survey has been carried out by Andrew MacKenzie who is extremely knowledgeable, and a pleasure to deal with.I will be using their services once again for a family friend in a couple of weeks timeI happily recommend them to anyone who requires excellent service, punctuality, and an extremely reasonable price ... 5 stars from me.