The concept of mortgage valuations and building surveys is often misunderstood by prospective buyers and property owners when purchasing a new property. Here we clarify the differences to help you understand which report you need.
A Mortgage valuation and Building Survey are completely different reports, intended for different audiences but do you know the difference and if you need just one or both reports? Choosing whether you need a building survey and / or mortgage valuation will depend on your needs as a buyer, your budget, and the age and type of property. Here is a brief guide on the differences between the two.
Building surveys provide a comprehensive report on both the internal and external areas of the property, commenting on its general condition and highlighting any evidence of structural movement (both historic and active), timber defects, and issues relating to dampness and the roof.
This type of survey is intended for the sole benefit of the prospective buyer – the report outlines any building defects and often suggests remedies as well as the level of urgency. Building surveys are recommended for all property purchased but are particularly useful for:
- Assessing older, unusual or listed buildings
- When planning extension and alteration works
- Providing a professional opinion if you suspect there may be defects present
- Avoiding unexpected and expensive outlays to rectify unforeseen problems
Although the costs to instruct a building survey can feel like another expense when you’re already spending a lot of money in the purchase process, it is a worthwhile investment to help avoid future problems at the property. A building survey can also provide scope for negotiation to reduce the property asking price if any defects or major maintenance requirements are uncovered.
In comparison, mortgage valuations are intended for the mortgage lender’s benefit rather than for the homeowner, and only provides sufficient information for them to decide whether the property is safe to lend on. Due to this, they are limited in the level of detail they go into regarding the structural condition of the property and may only highlight obviously visible defects but this is not discussed in detail.
Because mortgage valuations are conducted for the lender, you are not automatically entitled to a copy of the report but may be able to get a copy from your lender. In a struggling property market, mortgage valuations may be cautious, giving a lower property value, This may reduce the lender’s risk but pose difficulties for the home buyer if the property is not deemed to be worth the value they are due to pay for it.
Find out what affects the value of your property in our valuation blog.
Key differences summarised
- Building surveys provide a comprehensive report on both the internal and external areas of the property
- Building surveys are intended for the sole benefit of the prospective buyer
- Mortgage valuations are intended for the mortgage lender’s benefit rather than for the homeowner
- Mortgage valuations provide minimal information regarding the structural condition of the property
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