FREQUENTLY ASKED QUESTIONS
Dear Right Survey, I’m buying a flat so do I need to get an RICS valuation done – can I use to help arrange the mortgage?
Asked by: Dianna
Thanks for your question. If you take out a mortgage, the bank will want to arrange an inspection for mortgage valuation purposes. They normally charge you the fee for this – despite the fact that it’s done for their benefit to confirm the property is worth the agreed purchase price. They want to know this in case you default on paying the mortgage and they need to re-possess and sell it to get all their money back (plus fees)!
Mortgage valuations are carried out by qualified valuers who are also chartered surveyors. But each lender appoints their own ‘panel’ of valuers, usually large corporate firms, or sometimes staff valuers employed by the banks. There are financial deals involved whereby some corporates who own chains of estate agents pass mortgage business to the banks in return for ‘introducer fees’ and/or valuation work.
The RICS valuation reports you can arrange via Rightsurvey are also done by qualified chartered surveyors so in theory they should be acceptable to banks, as it’s an independent professional opinion of market value. But because of the panel system in reality they wouldn’t accept them. The main reason for commissioning an independent RICS valuation report is for tax or matrimonial purposes – unlike estate agents’ valuations, these are legally binding and acceptable in evidence in Court or for tax assessments.
But if you’re buying a property without a mortgage it can be worth arranging an independent valuation, which includes a professional buildings insurance re-instatement calculation. This should give you peace-of-mind that you’re not paying over-the-odds and that the house construction type is one that’s acceptable to mortgage lenders. There are some types of construction such as PRC and older timber frame that sell at a discount to open market value because you can’t get a mortgage on them (and hence there are very few cash buyers) so this is important when you come to sell.
Alternatively you could kill two birds with one stone and get an RICS Homebuyers survey which includes a valuation.