When buying a property, be it your home or a buy to let, the property will need to be valued to ensure it is suitable security for the mortgage lender to lend against; but did you know that there are different types of property valuations that maybe you should consider? Here we explore the types of property valuations that are available in the current market.
What is a property valuation?
A property valuation is a valuation carried out by a suitability qualified individual who is a member of RICS (Royal Institute of Chartered Surveyors) or RPSA (Residential Property Surveyors Association). They will carry out an assessment of the property’s value, based on the location, condition and other factors. Once they have inspected the property, they will provide a report and valuation figure.
Basic valuation for mortgage purposes
A basic valuation will be instructed by the mortgage lender to establish the property valuation and to see if the property is suitable to lend money against. Generally you will have to pay for this survey upfront and the cost is normally linked to the estimated property value. In most cases, a physical valuation is carried out by the property surveyor, however in some cases (i.e. remortgage with lots of equity perhaps) some lenders do offer ‘desktop’ and ‘driveby’ valuations where the cost can be reduced or even free.
Normally the surveyor will review the property, use their market knowledge and seek evidence of local similar sold properties to establish an accurate market valuation. With these valuations the information can be limited, and it may not point out any repairs that are required.
A homebuyer’s survey is more in depth when compared to a ‘mortgage valuation’, and it is suitable for standard properties. The surveyor will provide a report highlighting any structural problems, damp issues, potential areas of concern, advice around repairs and maintenance.
It is worth noting that with this type of report the surveyor won’t look under the floorboards, so it is only able to identify concerns that are visible. A homebuyer report can also provide a property valuation and give an estimated rebuild cost. You can sometimes arrange a homebuyer survey through your mortgage lender or alternatively you can arrange it with a local surveyor yourself directly. It is worth shopping around to get the best price!
Full structural survey
A full structural survey is a detailed and comprehensive report worth considering if you are buying a property which is old and/or in poor condition and/or where you are planning major renovation works. The surveyor will look under the floorboards and look into the loft to identify any areas of concern. A full structural survey will flag up any structural issues and as a result, the surveyor will be able to advise you on any specialist reports that may be worthwhile i.e. an electrical survey.
Where to find a surveyor
It is important that you use a property surveyor which is suitably qualified. RICS (Royal Institute of Chartered Surveyors) provide surveys on many different property types. You can find a local RICS Surveyor by visiting https://www.ricsfirms.com/.
Buying a property can be the biggest financial commitment you will have to make in your lifetime and if you plan to live at the property for a long time it is worth considering the more in depth valuation reports described above.
Arranging a mortgage with The Money Hub
With lots of mortgage lenders and thousands of mortgage deals available, arranging a mortgage can be a stressful time. If you plan to buy a property and would like some mortgage advice, the mortgage advisers at The Money Hub are here to help. To speak to a member of our helpful team, please get in touch today!
DISCLAIMER: These articles are for information only and should not be construed as advice. You should always seek advice prior to taking any action.