What type of property valuations do you need for a mortgage?

Types of Property Valuations Explained

Disclaimer: This guide is for informational purposes only and does not constitute personal financial advice. Mortgage criteria vary by lender, and approval depends on individual circumstances. Always consult an FCA-authorised mortgage adviser for regulated advice.

Introduction

Property investments are long-term, and homebuyers need to ensure their chosen property is structurally sound and fairly priced. Lenders also use valuations to decide how much to lend and to ensure their investment is secure.

Types of Property Valuations

• Basic Valuation
• HomeBuyer Survey
• Building Survey

Basic Valuation

The lender conducts a basic valuation to establish the property’s worth and determine how much they are willing to lend. The surveyor looks for obvious defects that might impact lending decisions. You usually pay for the report, but you may not automatically receive a copy.

HomeBuyer Report

This report assesses the condition of a standard property in reasonable repair. It includes a valuation and a rebuild figure for insurance purposes. The report is paid for and owned by the client.

Building Survey

The most comprehensive survey, suitable for older or unique properties. It provides a detailed report of the property’s condition and highlights concerns. It does not include a valuation. You pay for and own this report.

Clients can sometimes commission a building survey alongside a basic valuation to reduce costs of having two separate reports.

Approximate Costs of Property Valuations

Typical costs:

• Basic Valuation: £150–£250
• HomeBuyer Report: £450–£550
• Building Survey: £750+, depending on property size

Condition Report

Suitable for relatively new properties in good order. Paid for by the client, it provides an overview of the property’s condition and urgent repairs. It does not include a valuation or rebuild figure. Reports use a traffic-light system:

• Red – Serious defects requiring further investigation
• Amber – Repairs needed but not serious
• Green – No defects apparent

After the Survey

Following a survey, possible outcomes include:

• The property is acceptable for lending or the mortgage is rejected
• The property is down valued
• Undertaking – minor repairs are needed and agreed to be done within a timeframe
• Retention – major repairs required; mortgage granted but some funds held back until completion

The surveyor must be recognized by the lender, and reports include valuation for security purposes and a rebuild cost (reinstatement value).

Valuations During the COVID-19 Pandemic

Lenders have used alternative methods like “drive-by” valuations or desk-based assessments due to social distancing. Physical surveys are requested if lenders feel it’s necessary to protect their investment.

FAQs

What is a basic property valuation?

A basic valuation is a lender-conducted assessment to determine the property’s worth and any obvious defects. It helps lenders decide how much to lend.

What is included in a HomeBuyer Report?

It evaluates a property’s condition, provides a valuation, and a rebuild figure for insurance. It’s suitable for standard properties in good repair.

What is a building survey?

A detailed report examining a property’s structure and condition, highlighting any concerns. It does not include a valuation and is ideal for older properties.

How much do property valuations cost?

Basic valuation: £150–£250, HomeBuyer Report: £450–£550, Building Survey: £750+ depending on property size.

Do all valuations include a rebuild cost?

Not all. Basic valuations typically include it for security purposes, while building surveys may not. HomeBuyer Reports include rebuild costs.

Can a valuation affect my mortgage?

Yes, lenders may reduce the mortgage amount or request repairs based on valuation findings.