Surveys

There are different types of surveys you can undertake.  The valuation has to be undertaken by a valuer approved by the lender.  In fact lenders will instruct the valuation themselves using their selected panel valuer and you have little choice on the matter.

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Basic Valuation

Although you may pay for it, this is for the benefit of the lender.  It is not a ‘report’ so you may not receive any documentation.  It is merely for the lender to confirm it is acceptable security for lending purposes.  If they are happy with the security and it has sufficient market value, they may proceed to offer.  That in itself indicates that the property is suitable security.  If they have any concerns, these will be highlighted either before they issue the offer or they will make it a condition of the offer or decline altogether.  Many estate agents still put buyers in a race that the first to valuation secures the property.  This really is poor on the part of the estate agent and/or the vendor and you may wish to consider avoiding such estate agents who have no real understanding of the house buying process and may result in lost fees.  Such estate agents are likely to assist in ‘gazumping’, the practice where another offer is accepted further down the line as this gives them extra incentive not to support the process you are going through.  Reputable estate agents will assist your purchase and support the process with full knowledge of realistic timelines.  The fact the lender has progressed to valuation does not mean the mortgage has been approved.   Some lenders will instruct the valuation as soon as they receive a full mortgage application but reject the application at a later stage whilst other lenders will only instruct a valuation once they have fully agreed your application.   The object here is to get a mortgage offer, not a valuation!  The offer will be based on the purchase price or the valuation, whichever is lower.

Some lenders will offer a free valuation, but a valuation is just that.  The valuer may point out any obvious issues that affect the security, but anything else that requires work may not be picked up. Generally takes 20-30 minutes and often it can be booked in fairly quickly.  The cost can vary depending on the property price, but it can also be free depending on the product.  Some lenders will give you the option of being able to upgrade to a different type of valuation, but this is best discussed on the merits of each case.

Homebuyers Report

This is a more detailed inspection of the property and will highlight serious issues such as damp and subsidence.   It will also comment on any remedial work that is needed and any maintenance required. Depending on the lender, you can pay to upgrade the basic valuation to a homebuyers report at the time of application.  It is generally hands-off so the surveyor will for example not look under floorboards.  The surveyor will recommend if anything further is required or whether any building regulations are in breach.  Usually takes 2-3hours.  As the mortgage offer isn’t dependant on a home buyers report, many buyers opt to have this carried out separately for speed.  Prices can vary and you are looking at paying at least £500-600 or more.  So it best to consider the options when making the application.

Building Survey

This is one of the most thorough inspections you can have and the surveyor will look under floorboards and in the attic!  Many buyers use this for older properties or where there may be concerns regarding the structure.  It can take 6-8hours to undertake and will report on any necessary works and potential costings.  Again prices can vary and it will be more costly than the above alternatives with prices often upwards of £1,000.  So it is best to consider the options and obtain quotes.

There are other reports also available, but these are the basic main 3 that apply to a house purchase.  For other options such as Snagging reports etc.., again discuss the concerns with your mortgage advisor or solicitor.

As your mortgage advisor may not have seen the property first hand, please discuss your survey requirements or any concerns prior to making the application.

Lenders

As mentioned you can have the survey type upgraded at the time of the application.  But we often discourage this. Why?

1. Time. Due to the time it takes to undertake a more thorough survey, it is likely the surveyor will book an appointment some weeks down the line.  Whereas the standard valuation may happen within a few days as it is relatively quick and easy.  The lender is only concerned with the valuation aspect but as that will also be undertaken at the same time as the more detailed survey, this will delay your mortgage application and Offer.  Therefore other processes involved will also be stalled whilst waiting for your mortgage offer, thus increasing the overall time to completion.  As well increasing the chances of another buyer getting in there before you!  And if you are renting, that’s possibly another month’s rent wasted.
2. Control. You can discuss any concerns directly with the surveyor as it is you that is appointing.  You have direct access and you can establish your own parameters and have a more bespoke service.  You can contact several surveyors and discuss the service standards and timescales to have this undertaken, and select the most appropriate one.  Going through a large 3rd party such as a lender, the fee will be fixed with a more automated process that will deliver a certain standard with their panel company.
3. Cost.  Lenders will have a fixed price based on property value for all types of surveys.  Not all lenders get involved with upgrading surveys, but the ones that do will just give you the chance to upgrade and then undertake the process for you.  It is not always that the lender will be more expensive, but often they are.  Remember it is an additional service you are taking from them and they will want to retain a fee.  But even if the cost of going through the lender is the same or slightly lower, you need to factor in the above 2 points.  Many of our clients have arranged their own surveys and found it more beneficial as not only have they been able to negotiate a better price (without a middle man) and managed to arrange the valuations a lot quicker by contacting 3 or 4 different local surveyors.

Royal Institute of Chartered Surveyors (RICS)

If you are looking at the various survey options, in the first instance speak to us.  Sometimes the lender may upgrade the basic valuation and this can be cost effective.  On other occasions it isn’t cost or time effective and so it may be best to undertake the basic valuation and your chosen survey separately.  Thus the time factor in terms of getting your mortgage approved can be impacted.

Lenders will use surveyors who are qualified.  There is no reason why you can not engage with them directly.  They undertake the surveys to the same standard and we strongly recommend using an RICS member.

It may be an idea to visit the RICS website (Click Here) and locate a local surveyor.  It is best to obtain a few quotes from different local valuers based near the subject property to ensure you benefit from their local knowledge and costings.

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