Mortgage Valuation or Home Survey? Two Different Checks When Buying a Property

When you buy a home with a mortgage, you may hear that the lender has arranged a valuation. It is easy to assume that means the property is being checked thoroughly for problems.

But a mortgage valuation and a home survey are two different things . They may both involve a surveyor, but they are commissioned for different reasons and answer different questions.

Understanding the distinction can help you decide what information you still need before committing to a property.

What does a mortgage valuation actually check?

The mortgage lender arranges a valuation to help decide whether the property is acceptable security for the loan. Put simply, the lender wants to know whether the property supports the borrowing being requested and meets its lending requirements.

A valuation may involve a visit to the property, but it can also be carried out using information available to the lender without a full internal inspection. The method depends on the lender and property.

This is not a detailed assessment of the home’s condition for the buyer . Even if the lender is content with its valuation, that does not mean the roof, walls, damp proofing, services or other parts of the building have been independently checked for you.

You might pay a valuation fee, the lender might include it in a mortgage product, or it may not be charged separately. Do not assume that paying for a valuation means you have bought a building survey.

What is a home survey for?

A home survey is intended to give the buyer information about the condition of the property. A qualified surveyor examines the building within the scope of the survey you have commissioned, highlights visible defects and risks, and may recommend further investigation.

It can help you consider questions such as whether repairs may be needed, whether you need specialist advice, and whether you are comfortable proceeding with the purchase.

A survey is not an unconditional guarantee that a property is free from defects. It is generally a visual inspection, and the extent of what the surveyor can inspect depends on the survey level, access and agreed terms. Hidden issues and specialist systems may need separate checks.

The important point is that a positive lender valuation does not replace a survey instructed for your benefit .

Which level of survey might be relevant?

The Royal Institution of Chartered Surveyors (RICS) describes three main levels of home survey. The appropriate level depends on the property and your concerns, not simply on the amount you are borrowing.

Level 1: a basic condition overview

Level 1 is generally designed for conventional properties built from common materials and appearing to be in good condition. It gives a relatively basic picture of visible condition and identifies matters that may need attention.

Level 2: more detail for a conventional property

Level 2 offers more information and advice about condition, defects and maintenance. It is commonly suitable for more conventional homes in reasonable condition. A Level 2 service may be offered with or without a separate valuation, so check exactly what has been commissioned.

Level 3: more detailed assessment

Level 3 is more detailed and can be useful for older, larger, unusual or significantly altered properties, or where there are concerns about the building’s condition. It can provide more extensive discussion of defects, potential causes and repair options.

These descriptions are only a starting point. A surveyor is best placed to discuss the appropriate level, any limitations and whether additional specialist reports are sensible.

When should you arrange the checks?

For purchases in England and Wales, buyers commonly arrange a survey after an offer has been accepted and before exchange of contracts, so there is time to consider the findings before becoming legally committed. The lender’s valuation follows the mortgage application process and may happen on a different timetable.

Property purchasing works differently in Scotland. Sellers generally provide a Home Report containing a survey and valuation, alongside other prescribed information. Buyers may still need to consider the report’s limitations and whether extra checks are appropriate.

Your conveyancer can explain the contractual position and timing for your particular transaction. The lender’s valuation and your survey do not necessarily happen in a fixed order.

What if the lender’s valuation and the agreed price differ?

A lender may decide that a property is worth less for mortgage purposes than the purchase price you have agreed. That can change the amount or terms the lender is willing to offer.

It does not automatically tell you whether the property is a good or bad purchase, and it is not the same as a survey identifying repair work. The sensible next step depends on the valuation, the lender’s decision, your finances and the legal position. You may need to discuss your options with your mortgage adviser, conveyancer and the seller.

Equally, a lender being satisfied with the value does not mean the home is free from defects.

Five questions worth asking before you commit

• Who is the report for? Is this the lender’s valuation or a survey commissioned for you?
• What will be inspected? Ask about the survey level, access and any exclusions.
• Will you receive the findings? Find out what report you are entitled to see and who can rely on it.
• What still needs checking? A survey may recommend a roof, damp, drainage, structural or other specialist investigation.
• When do you need the results? Discuss the purchase timetable and any legal commitment with your conveyancer.

Two checks, two different purposes

A mortgage valuation helps a lender assess the property as security. A home survey helps a buyer understand the property they are considering taking on.

Both can be useful, but one should not be mistaken for the other. Knowing what each report does, and does not, cover is a straightforward part of buying with your eyes open.

General information only. This article does not replace independent surveying, legal advice or a personalised mortgage assessment. Requirements and processes vary by lender, property and UK nation.

Mortgages are secured against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.

My Simple Mortgage Ltd T/A My Simple Mortgage is an Appointed Representative of Stonebridge Mortgage Solutions Ltd, which is authorised and regulated by the Financial Conduct Authority.

Further reading

• RICS, House surveys: costs, types and benefits .
• Financial Ombudsman Service, Mortgage valuations and surveys .
• MoneyHelper, Mortgage fees and costs when buying or selling a home .

• UK Finance, Valuation policy and guidance .
• Scottish Government, Home Report guidance .