Mortgage Valuation Survey Types and Fees

In buying a house these days, not only is it a good idea to have a professional value your property, but it’s mandatory when taking out a mortgage. So, with a variety of options, at a range of different costs, which valuation do you really need?

Below we discuss the different types and situations they may be necessary, along with approximate costs for each. Of course every property is different, so it’s impossible to write hard and fast advice in an article online – I merely aim to offer a good source of information to help you make the right decision.

To lend you a huge chunk of money, any lender will want to assess the property they are securing against to ensure it’s suitable. So, at a minimum, a basic valuation must be carried out, and the lender can choose to do this in various ways. In an attempt to save resources and acknowledge that not every property needs a complete survey, if, for instance, the mortgage has a low loan value, lenders will not always request that a surveyor view the property.

• Home inspection: A scheduled appointment to visit the property and do basic checks for damage, etc. The valuer will also check the land registry for recently sold prices of comparable properties.
• Drive-by: An unscheduled drive down the street to ensure the property and area are suitable, as well as comparing similar properties on the land registry etc.
• Desktop: The valuer doesn’t leave the office, checking only online at comparison sites and the land registry for recently sold prices of comparable properties.
• Automated Valuation Model (AVM): In certain circumstances, adequately equipped lenders can choose to implement systems to automatically value a property. These state-of-the-art software programs predict the value of a property using mathematical modelling combined with a database of property values and postcodes. These are generally reserved for remortgages on low-risk properties and applications with low loan-to-value ratios to minimise the risk of lending on a defective property. The benefit of these is that if you are remortgaging, you may be able to get a mortgage offer within minutes and rapidly speed up the process.

Level one valuations are often free for remortgages and even with some purchase products. However, they tend to be more expensive for buy-to-let applications. Typical fees are between £0 and £500, depending on the property value.

To get a better idea of the structure and potential damage/repair work a property may require, you can commission other types of more detailed surveys. A level 2 survey is commonly known as a ‘home-buyers report’ and includes additional checks for damp and dry rot etc. Typically, a surveyor will spend a couple of hours at the property checking it over and may inspect roof and loft areas with adequate access.

The report will usually indicate what needs urgent action, what needs attention soon, and what may become a problem in the future. It should also give a valuation based on the value with/without any treatment work being done. Fees for these again vary depending on property value but range from £400 – £1000+.

Complete surveys are usually reserved for properties that are known or suspected to be defective in some way. They assess the property for everything a level 1 and 2 would, and in addition inspect the entire property for defects and issues, including the electrics, foundations, cellar and loft areas etc.

The valuer will likely spend all day at the property making an assessment. The cost is usually anywhere from £700-£2000+ depending on property value.

Should any valuation indicate problems with the property, the valuer’s report may advise the lender to make it a requirement to instruct specialist reports for further investigation and, if necessary, to gather quotes for work required so the lender can decide if they need to make a mortgage retention on some of the funds being released.

For example, if there are serious signs of damp, the valuer may recommend damp reporting to investigate the extent of the problem, and provide an estimate of the cost to fix it. This isn’t always a bad thing if you’re buying, as it’s a great bargaining tool to go back to the vendor/estate agent and haggle down the purchase price as compensation or, in fact, request the work is completed before the purchase goes through.

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