Every mortgage lender will want a minimum standard of a basic mortgage valuation report. This will check that the price you are paying for the property is reasonable and will hopefully point out obvious defects. Most of the time, you will not get a copy of this report, and may not be informed of anything unless there is an issue which the valuer has brought to the lender’s attention for which causes them concern.
You have a choice to opt for something more in depth, whether that be a homebuyers’ report or a building survey.
Your mortgage lender will usually arrange either of these reports on your behalf if you wish, however I believe in most cases, it is best for you to arrange your own separately.
Firstly, if you are to pay for a detailed report, which then gets passed on to the lender, you may end up shooting yourself in the foot by giving the lender too much information. Say for example there is a slight issue which you are made aware of, but you are not concerned about, then by having this fact also pointed out to your lender, you may affect their willingness to lend. If you had obtained a private report, you do not have an obligation to disclose this to them, and it may be something that wouldn’t have been picked up on the basic mortgage valuation report.
Secondly, you get to choose who you employ to carry out the report. If you arrange the report via the mortgage lender, you will usually get what you are given, and some of the reports are of a very poor standard. It is luck of the draw who you get, but some surveyors take a very cautious approach and seem to flag everything as a potential danger. They often put things like ‘The electrics may be faulty, you should obtain an electrical report’, just to cover their own back if something goes wrong. I saw a report recently which gave the biggest risk warning they could to the fact that the property did not have smoke alarms, and was at risk of fire. It then went on to say that a specialist firm should be employed in order to assess the situation. Personally I don’t think this is a major problem and rather than employ a specialist firm to ‘assess the situation’, I would probably just buy a smoke alarm. It isn’t an issue with the property, it is just the current occupants haven’t fit them.
On the downside, it does mean you may incur more costs. The lender will still insist they instruct their own valuer, even if you are to obtain your own private survey and so you can end up paying twice.
Jason Hinde FPFS, Cert SMP – Chartered Financial Planner
24th April 2017