What to expect from the lender’s valuation

The lender will arrange for a qualified surveyor to inspect the property you’re looking to buy, and check its value. As well as make sure that it’s a property they’ll lend against.

What is a mortgage lender’s valuation?

A lender’s valuation is specific to the property you’re looking to buy. It’s a survey that gives the lender an independent confirmation of the property’s value. It includes checking the prices of similar properties sold in the area.

The valuation also tells the lender if there are any features or significant defects that could affect the property’s value. After all, the lender is lending money against this property, so they have to be sure it meets their lending criteria and it’s priced appropriately.

Keep in mind that if the property you’re looking to buy isn’t the kind the lender will lend against, they might refuse your mortgage application. This might include really run down properties, or those in a high-risk flood zone, or above a shop or restaurant.

The house buying process is slightly different in Scotland. It’s the responsibility of the seller to provide a Home Report. It has three sections – a single survey and valuation, a property questionnaire and an energy report. You can learn more about Home Reports in Scotland from the Government’s website.

What’s involved?

The lender will instruct a surveyor of their choice to conduct the valuation, which then typically takes place within two weeks.

Keep in mind that the valuation report is for the lender’s benefit – and often only 2 to 3 pages in length. If you’d like to see it you might be able to, but not all lenders will provide you with a copy. Though they might let you know if the survey flagged any serious issues.

It’s not a detailed survey and won’t tell you what repairs or maintenance you might need to carry out. If that’s what you’d like, take a look below to find out about the other types of survey you could get.

Who pays for it?

You’ll have to pay the lender’s valuation fee when you make your application. Some lenders don’t charge for valuations, so check your Key Facts Illustration to be sure.

Other types of surveys

If you’d like more peace of mind when it comes to the condition of your property, then there are more in-depth surveys available. You might be able to get them done at the same time as the lender’s valuation, but remember that a survey and a valuation are not the same thing. And anything you arrange will cost you extra.

There are three key types of home surveys to be aware of:

HomeBuyer Report

A HomeBuyer Report highlights any major structural problems, like damp or subsidence, but it doesn’t go beyond the floorboards or behind the walls. You’ll get a report with recommendations for repairs, together with the approximate costs to fix them.

Some HomeBuyer reports include a property valuation, The cost usually starts in the region of £400 depending on the size and value of the property.

Building survey

A building survey is much more thorough than a HomeBuyer Report, and will flag internal and exterior problems. The surveyor will be much more hands on, going into the attic, checking under the eaves, if relevant, as well as under the floorboards if necessary.

It can cost £600 or more, depending on the size, type and value of the property you’re buying, and will give you a full breakdown of the structure and condition that it’s in.

People usually consider it when buying a much older or more unusual property, or perhaps one in poor condition. A building survey outlines the works you would need to carry out to address anything highlighted.

Full building survey or full structural survey

This is considered the most comprehensive report available, as it provides you with an in-depth analysis of the property’s condition and includes advice on defects, repairs and maintenance options.

If a property is in poor condition, is older, larger, or had alterations, or if you’re planning alterations, this survey highlights any serious issues, that could impact the value of the property.

As you might expect, it’s more expensive, and can cost from £700 upwards, depending on the surveyor and the size of the property.

To summarise…

  • Mortgage lenders will arrange for a qualified surveyor to inspect the property you’re buying, and assess its value – they’ll also identify any defects or features that could impact its worth
  • If the property doesn’t meet the lender’s criteria, the mortgage application might be refused
  • In Scotland, sellers are responsible for providing a Home Report, which includes a survey, property questionnaire, and energy report
  • There may be a valuation fee charged by the lender, though some lenders offer this free of charge

Please note: Rightmove is not authorised to give financial advice; the information and opinions provided in these articles are not intended to be financial advice and should not be relied upon when making financial decisions. Please seek advice from a regulated mortgage adviser.