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23 Nov 2014

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Mortgage Surveys Explained

Mortgage Survey

Mortgage surveys are essential part of purchasing a property, though only a basic mortgage survey is required on the mortgage lenders behalf. Below are a summary of the three types of mortgage surveys.

Basic Mortgage Valuation

When you arrange your mortgage, your mortgage lender will commission a surveyor to carry out a basic mortgage valuation, which is a limited check on the property to ensure the property is worth the money the lender is lending you. You will normally have to pay a fee upwards of £150, depending on the size and purchase price of the property, although some lenders may waive the valuation fee as an incentive to secure your mortgage.

This valuation is not a full survey and is unlikely to go into detail about the state of the property. There may be structural problems in the property that would cost a huge amount to put right that simply won’t be picked up. The majority of home buyers rely on the lender’s mortgage valuation alone, but the Council of Mortgage Lenders strongly advise that you get a more detailed survey done before you purchase a property.

Homebuyer’s surveys and building surveys

The Royal Institution of Chartered Surveyors (RICS) recommends that all home buyer's commission a homebuyer's survey or a comprehensive building survey.

A homebuyer's survey (also known as a homebuyer’s report) is a survey done to a standard format set out by RICS. It’s most suitable for conventional properties built within the last 150 years and are in reasonable condition. Wiring, drainage and gas are not covered, so you may want a specialist to check these as well.

Homebuyer’s surveys are not usually suitable for properties in need of renovation, or if you’re planning major alterations. Your mortgage lender’s surveyor will normally be willing to do the mortgage valuation and the homebuyer’s survey at the same time which will save you money on the cost of commissioning both separately.

Building Survey


The most thorough report is a building survey and is a full structural inspection of a property. It is suitable for all properties, especially: listed buildings; older properties; buildings constructed in an unusual way, however old they are; properties you plan to renovate or alter in any way; and properties that have already had extensive alterations. As with the homebuyer’s survey, if the surveyor you instruct is acceptable to your mortgage lender, the cost of a separate valuation may be avoided. In practice very few of the major mortgage lenders will allow you to instruct a surveyor to carry out a mortgage valuation. It is more common to instruct a building survey separately and have a basic survey from your mortgage lender, making the building survey much more expensive compared with homebuyer's survey carried out by the mortgage lender.

 

Typical survey fee costs


The cost of your survey will depend on the value of the property. For an average £150,000 to £200,000 house, a homebuyer’s survey will cost between £300 and £420, and a building survey between £560 and £730. The variations in price depend on the location and ease of access of the property, and prices for more expensive properties can seem prohibitive.

The cost of surveys instructed via a mortgage lender will include an administration fee and as such will be slightly more expensive compared to an independent surveyor. However by having a homebuyer's report from the mortgage lender the cost of a basic lenders mortgage valuation is saved as it is incorporated with in the homebuyer fee.

The table below shows the cost of arranging a valuation or homebuyer report from a typical mortgage lender.

Property price

Mortgage valuation report fee

Homebuyer report Fee

£0 - £50,000 £205 £350
£50,001 - £100,000 £245 £400
£100,001 - £150,000 £285 £445
£150,001 - £200,000 £325 £495
£200,001 - £250,000 £370 £550
£250,001 - £300,000 £405 £600
£300,001 - £400,000 £475 £660
£400,001 - £500,000 £545 £660
£500,001 - £600,000 £600 By arrangement
£600,001 - £700,000 £635 By arrangement
£700,001 - £1m £685 By arrangement
£1m - £1.5m £980 By arrangement
£1.5m - £2m £1,210 By arrangement
£2m - £2.5m £1,440 By arrangement
£2.5m - £3m £1,670 By arrangement

 

If you have any questions on mortgage surveys please feel free to contact us or click on the link above to The Royal Institution of Chartered Surveyors

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YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Think carefully before securing other debts against your home, your home may be repossessed if you do not keep up repayments on your mortgage.

The Financial Conduct Authority does not regulate Conveyancing Activities

Go Direct.co.uk is a trading style for website purposes of Go Direct UK Ltd.

Go Financial Services is a trading style of Go Direct UK Ltd which is an appointed representative of Personal Touch Financial Services Ltd which is authorised and regulated by the Financial Conduct Authority. Registered in England & Wales Company 5703224. FCA Number 456600

We normally do not charge a fee for mortgage advice, however a fee paying option is available. Our typical fee would be £500

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