Mortgage Valuation

A mortgage valuation is requested by the bank or building society that is considering lending you the money to buy a property. The valuation is designed to provide the lender with appropriate information to decide whether the property is safe to lend on. It will also provide the current market value of the property. This means the lender will find out how much it can loan based on that market value. The valuation takes place for the benefit of the lender rather than the benefit of the would-be buyer.

You would typically pay for the report to take place, although it is unlikely you would receive a copy. You may not even see what the surveyor has written about the property. The report would include details of the condition of the property, which could affect its value. For example, if significant work was required to make the property habitable, it would be valued at less than the amount it would be once the work was completed. The condition of a property could influence whether the lender goes ahead with a mortgage offer or whether they decide to revise down the amount they are willing to lend.

However, a mortgage valuation does not go into the same depth a survey would. If there are obvious issues, these will be noted in the report, but anything else would not be. A lender would not opt for a full structural survey, for instance, as this doesn’t provide the likely value of the property. They only require enough information to base their mortgage offer on if they decide to provide the applicant with one.