What is a Mortgage Valuation - isn’t that a survey?

the short answer

A mortgage valuation isn't a survey. It’s a very limited check on the property you’re buying that your lender carries out to ensure it’s worth the money they’re lending you.

A Mortgage Valuation is only a brief report that the bank or building society uses to enable them to decide whether or not to give you a loan.

A Mortgage Valuation is for the lender’s benefit - not yours.

We would advise you to buy either a Home Buyer’s Report & Valuation or a Building Survey (which used to be called a Structural Survey) depending on the type of property you’re buying and its value. Then you’ll have the information to make an informed choice.

A Mortgage Valuation will be based upon a limited visual inspection of as much of the exterior and interior of the property as the valuer can access without difficulty. The valuer will not move furniture or the contents of cupboards and lofts and s/he will not lift any floor coverings. The valuer will not test services or examine drains. Provided it’s reasonably accessible, the roof space will be inspected only to the extent visible from the access hatch without entering it. When a moisture meter is used, only random tests for dampness will be made.

There might well be defects in the property which can’t be revealed by the Mortgage Valuation. These may not affect the lender’s decision to make a mortgage loan but they could matter to you. For example, there may be structural problems in the property that will cost a huge amount to put right – but they won’t appear in the valuation report.

If you know about these and other serious problems before you commit to buy, then you can make an informed choice. You can negotiate on price, arrange to have repairs carried out before you move in, draw down additional money as part of the mortgage, and incorporate these serious repairs with other works taking place – for example an extension to the kitchen. Or you can withdraw from the purchase.

If it’s a flat, it’s likely that you can make your landlord carry out repairs, thereby adding value to the property.

For high value properties, repairing worn out or defective parts of a building can be very expensive. Having properly costed repairs prepared by a chartered surveyor as part of a building survey is a powerful negotiating tool.

The purchase of your own home is generally regarded as the biggest financial outlay you’ll ever make. For some people this asset will be their pension. This is why it’s really important you have a survey.

REMEMBER: It’s too late to try to renegotiate the price once you have exchanged contracts.

Even if you’re paying for a Mortgage Valuation report, it’s still sensible and prudent to arrange a survey by your own surveyor, not one appointed by the mortgage lender. The Consumer Association’s Which? Magazine and the Council of Mortgage Lenders, as well as the Royal Institution of Chartered Surveyors, all recommend it.

Smart homebuyers realise why it’s so important to have a survey to tell them whether the property is free from significant defect and associated expense.

When buying a home you should never rely solely on a Mortgage Valuation. The lenders themselves state this within their terms and conditions. Do take your time to consider the benefits of each type of survey and which type would best suit your needs.

Money wisely spent on a survey could save you thousands of pounds on repairs or replacements. The survey will also be a useful negotiating tool to further reduce the price you pay for your new home and if no significant repairs or expenditure are required then at least you have peace of mind.