A valuation is not a survey

September 24, 2019

A valuation is not a survey – this is a common misconception amongst first time buyers and even repeat homebuyers.

A valuation at its core, is a limited financial check of the property carried out to ensure the it is worth the amount of money being paid for it, in order to calculate the loan the lender is able to offer.

The valuation report carried out for the lender is normally executed by a RICS-registered valuer who has a duty to report independently and accurately the market value to the lender. All RICS valuers in the UK are regulated by RICS against international valuation and ethics standards.

The market value is based on comparable market evidence, which is usually confirmation of a minimum of three sales transaction of similar types of properties in the local area, and also the professional’s knowledge of the local market including supply and demand dynamics.

For this reason, it is quite possible that the lenders valuation and market value do not match the asking price of a property set by a broker, seller or agent.

In many instances the property itself is never visited during a valuation survey and a lot of the market analysis is done remotely. A valuation survey represents the bank and has little to do with the condition of the property. It does not protect the purchaser from hidden costs. On many occasions the valuation report cannot be seen by the homebuyer.

A home survey is a far more extensive report that establishes the general condition of the property at the time of purchase and is there to inform and protect the buyer of potential costs such as damp, electrics, subsidence, window replacements etc…

The three main types of home survey are: RICS condition report; RICS homebuyer report; and RICS building survey. To find out more about the differences between the types of house surveys have a look at the “Types of RICS survey” blog on our help and advice page.

In conclusion, the key things to remember are: A valuation survey is for the lenders and a home survey is for you, the homebuyer. The valuation survey will not mention the condition of the property whereas that is the primary detail a house survey will contain.