Taking a closer look at the importance of a home survey and how it differs from a mortgage valuation
The home buying process is often an emotional rollercoaster, where it’s easy to form a strong connection with a potential new property within a very short space of time – even before you have the full picture of the state of the property. This may sometimes mean you can more easily overlook potential works and other unforeseen issues surrounding the current state of the property; including, but not limited to, the condition of the roof, the age of the boiler, the electrics, its windows and drainage.
It's at this point where the different stages and the complexity of a property transaction need to be made clear, so that buyers can feel secure in knowing what they're purchasing. For example, areas which continue to generate plenty of misconceptions is the difference between a mortgage valuation and a home survey. Late 2022, a webinar poll conducted by Countrywide Surveying Services highlighted that four out of five consumers still confuse a mortgage valuation with a home survey. When asked the question – is the mortgage valuation still thought of as a home survey? An overwhelming 80% of respondents believed this to be the case, with only 20% disagreeing with the statement. This data, alongside regular anecdotal feedback received, indicates that there are still a worryingly large number of people who believe that a mortgage valuation could uncover any issues with the property they are looking to purchase.
This highlights what a precarious position many buyers are leaving themselves in if they don’t source the right level of information or receive the right advice, especially if an unexpected and potentially expensive issue arises post-completion. A home survey is the solution and is a vital component in helping to protect and generate valuable peace of mind for what is usually the largest financial decision that people will make over the course of their lifetimes.
So let’s clarify the difference between a mortgage valuation and a home survey.
What is a mortgage valuation?
A mortgage valuation is the advice provided to banks and building societies by a RICS registered valuer to help them check the property’s value. This can then be compared to the value of the mortgage the buyer applied for and will help the mortgage lender decide whether or not to offer them a mortgage for that value.
It’s important to remember that a mortgage lender’s valuation report is not a survey. It merely tells the lender whether or not the property offers reasonable security on the loan. A RICS Home Survey will inform potential buyers on the actual condition of the property. This information can be invaluable during price negotiations, and can also help them avoid expensive surprises after they’ve moved in.
