Need to know: Mortgage valuations and home surveys

In order to buy your home, you may require a mortgage to make up the shortfall between your savings and the purchase price of the property you wish to buy.

Buying a home is likely to be the biggest financial commitment you’ll ever make, so it is important to obtain as much upfront information as possible.

Mortgage Valuation Report

Once your mortgage application has been approved, the next important step is the completion of the Mortgage Valuation Report (MVR), which your lender will insist on before they approve your loan. This is arranged by your lender and completed by a Registered Valuer, who is a member of the Royal Institution of Charted Surveyors (RICS).

The MVR assesses whether the property you are purchasing is a suitable security for secured lending purposes. It assesses several key things including the value of the property; any signs of significant defects; and whether the property is an acceptable construction type.

This report will give a realistic valuation of your chosen property, based on factors such as the property's age and condition. However, it won’t highlight any potential problems or repairs and it is not a survey. If you are looking for a more in-depth survey, don’t rely on this type of report alone – you should always seek your own independent professional advice on the condition of the property you are purchasing.

Home Surveys

It is vital that you obtain information on the condition of your home prior to committing to the purchase. A home survey checks the condition of your home and any potential issues (i.e. does the house have a leaky roof?) and to ensure you’re making the right investment. It could save you a huge amount of money in the long run.

It is a more detailed inspection of the property and is carried out for the benefit of you – the purchaser; so that you know the pros and cons of the property you are buying. There are a number of types of surveys based on the age and condition of the property in question.

Different types of home survey reports

You need to make sure you know the difference before you decide on which one to choose. A RICS qualified surveyor can assist you in making the right choice based on your situation and the property you are buying. Countrywide Surveying Services have over 450 in-house Royal Institute of Chartered Surveyors (RICS) qualified and registered valuers.

• The RICS Home Survey Level 1 report is based on a visual inspection, less comprehensive than the other two reports and more suitable for conventional properties in reasonable condition. It offers a summary of risks to the building, people and groups and an assessment of the relative importance of the defects.
  Countrywide Surveying Services has its own RICS Level 1 equivalent report titled the HomeFact Report, which describes our opinion of the visible condition and state of repair of the property and includes some extra features such as helping you decide whether you need extra advice before committing to purchase, general guidance for major repairs and general on-going maintenance tips. 
• The RICS Home Survey Level 2 report is the most popular choice for survey products in the market. Previously known as an RICS HomeBuyer Report, it gives a more detailed overview of the condition of the property, includes a more extensive visual inspection and identifies problems the surveyor considers may affect the value of the property. Although no tests are taken, the report objectively describes the condition of the different elements of the property and provides an assessment of the relative importance of the defects/problems.
• The last level of survey is the RICS Home Survey Level 3, or otherwise known as a Building Survey. This survey is a detailed visual inspection of the building, its services and the grounds, giving extensive information about the structure and fabric of the property. It will provide advice on repairs and maintenance and is a wise choice if you’re buying a more complex property, doer-upper, a listed building or if you are planning to do extensive work to the property.

What you pay for a survey depends on the value of your chosen property, the subject property and the type of report you choose. The more comprehensive report will be more costly. Expect to pay somewhere in the region of £500 - £600 for a RICS Home Survey Level 2 and £1,000 - £1,200 for a Level 3. In short, surveys don’t come cheap, but they can save you money, and heartache, in the long run.

Still undecided? Read on for advice from our surveys expert and step-by-step checklist to see you through the process.

Meet the expert

Ana Bajri, Senior Technical Manager- Risk & Compliance, Countrywide Surveying Services

Why is having an independent home survey so important?
A home survey delivered by a qualified surveyor provides vital information that can be invaluable during price negotiations, and will also help you avoid expensive surprises after you’ve moved in. 

A surveyor is highly trained to consider all aspects of the property, from the condition to structural stability. Professional surveyors usually have many years of experience and are technically qualified to advise on the condition of your home. Choosing the right survey will help highlight any serious problems and advise you of the specific risks before you commit to the process of buying a property.

What is the objective of a home survey?
A home survey looks at all elements of the property you’re buying and discloses its condition. The surveyor can then advise on repairs, maintenance or improvements that will need to be carried out.

Can you ever rely on a Mortgage Valuation Report or a Home Survey alone?
It’s important to remember that the mortgage valuation report is not a survey. It merely tells your lender whether or not the property is reasonable security for your loan so you should not rely on this report alone as an assessment on the condition of the property. A home survey covers more aspects, such as damp, services, potential defects with the roof and so on. A more comprehensive report may be recommended depending on the type, age and condition of the property you’re buying.

How can you find a good surveyor?
Personal recommendation is always a good way. Ask anyone who has recently bought a home or your estate agent, lender or solicitor. But it’s really important to make sure your surveyor belongs to the Royal Institute of Chartered Surveyors (RICS). You can search for your local RICS regulated firm and qualified surveyors on the RICS website.

What should you do if the survey uncovers a problem?
Speak to your surveyor, legal adviser and the selling agent to understand the full extent of your report. Minor problems can usually be resolved, but it’s the larger issues, such as structural problems you need to watch out for.

When should you walk away from a property?
The decision is ultimately your own but get proper professional advice before you make a final decision.

Your home survey checklist:

Here are some handy tips to ensure your survey goes smoothly and efficiently.

1. Choose the right survey
   Engage with a qualified surveyor early in the process. They can advise you on the right level of survey for your property. Set out any requirements you have and any specific elements in the property that may be concerning you. Ask them to clarify anything that doesn’t make sense so you can better understand potential issues and problems.
2. Understand the report
   Your home survey report will most probably be lengthy. Read it carefully and if you have any questions, get your surveyor to talk you through it.
3. Don’t panic
   Should any issues arise out of the survey, ask your surveyor to give you an idea of the cost to fix the problem. You can use these estimates to renegotiate the price or ask the vendor to fix the problem. Discuss any legal issues with your solicitor.
4. Ask plenty of questions
   Essentially, you’re ascertaining if the property is value for money and if there will be any major expenses beyond what you’re paying for it. Be satisfied with answers before you proceed.
5. Second opinions
   If you’re unsure about the results of your survey, or if the seller disagrees, you can get another survey carried out. By this stage you will have spent a sizeable sum of money, which you won’t get back if the sale falls through.