This tends to come with the assumption that a mortgage valuation essentially does the same job as a survey and will involve a physical inspection of the property. Obviously, this is certainly not the case.
The reality is that there remains a significant knowledge gap around the difference between a survey and a mortgage valuation, in addition to how surveys can highlight any serious problems and advise buyers of any works that may need to be completed in order to get the property up to their desired standards.
And this is vital information that offers valuable peace of mind for what is usually the largest financial decision that people will make over the course of their lifetimes.
A home survey is recommended
Rob Stevens, head of property risk at Nationwide Building Society, said: “As part of the mortgage application process, the lender will arrange and carry out a mortgage valuation. It is really important to remember these are for the mortgage provider only and the customer won’t get a copy of the report. The mortgage valuation may not always involve a physical inspection or visit to the property, as it may be an automated valuation model (AVM) or a desktop valuation.
“We always recommend the customer gets a home survey done when they buy a property. The surveyor that does the home survey will be a member of RICS (Royal Institution of Chartered Surveyors) and the customer gets a report on the property’s condition that is tailored to their needs. There are three levels of survey – Home Survey Level 1, 2 and 3, and it is best to speak to a surveyor to decide which is best depending upon the property and the risks that need assessing.”
A deeper insight into a property
As Rob highlights, the risk of not obtaining a survey is that defects are not identified that could pose immediate or future risks, costs, disruption and upset. Being hit with a bill that you were not expecting does not allow you to budget or plan for any necessary repairs and doesn’t give you the opportunity to negotiate with the seller before you commit to the purchase.
Everyone who is a property professional should be encouraging and supporting customers to make decisions in their best interests. When purchasing, having a RICS surveyor provide a professional report detailing the condition of the property is, to me, quite clearly in the customers’ best interests.
In fact, this forms part of Consumer Duty, to act to deliver good outcomes for retail customers supporting them through their journey to pursue their financial objectives.
It’s essential for this knowledge gap to be addressed as early as possible in the homebuying process, meaning estate agents, mortgage brokers, surveyors, solicitors and lenders all need to help buyers realise the value of a survey.
If not, then those buyers who think they don’t need a survey because their mortgage lender is arranging one could be exposed to unknown property-related issues and potentially serious financial implications further down the line.
