Should you rely on a desktop mortgage valuation?

mortgage valuation is not a building survey

It is interesting to see just how reliant High Street mortgage providers are becoming on an automated mortgage valuation.

On Your Side

A recent experience with one that claimed to be On My Side was a good example. There was an implied acceptance that confirmation of our anticipated valuation identified a ‘good’ property. The mortgage valuation report came back and and it was OK to proceed to purchase! The representative appeared confident in the accuracy of his system. This was demonstrated with graphs and tables of similar properties in the area. What they didn’t make 100% clear was that their sophisticated, desktop mortgage valuation system had confirmed it was OK for them to lend us the money. No account had been taken of the property’s condition. It was more like On Their Side!

A trained pair of eyes hadn’t spent a few hours looking around every part of the property and considered its structural condition. No consideration had been taken on how it might be possible to alter or extend the property. Local area factors had not been reviewed such as ground conditions or local amenities. No tests had been carried out to gauge damp or seriousness of cracks. Floors hadn’t been looked at for rot. The roof hadn’t been checked for leaks.

Building Surveys can save many times their initial cost

When listed out, as we did in this post, the areas covered by our own RICS building survey report are extensive and provide the home buyer with an accurate and actionable report. We even go as far as to provide cost estimates for the areas we have highlighted as requiring attention. This can provide a good basis for negotiation when the time comes!

RICS are trying to highlight this over reliance on valuations by removing the mortgage valuation section from their entry level Home-Buyers report, to identify it as a survey only service. Indeed our own Building Survey Report is sold on the explicit understanding that it does not include a valuation.

We believe that estate agents, lawyers and lenders should be making every effort to provide home buyers with clear advice. In particular the need for a good quality building survey provided by;  a trained, independent, chartered, local, surveyor. It might just be the best few hundred pounds you invest in your new property!

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