What Is a Mortgage Valuation?
A mortgage valuation is conducted for the lender's benefit, not yours. Its primary purpose is to confirm that the property provides adequate security for the loan. The valuer assesses whether the property is worth at least the amount you want to borrow against it, and flags any significant issues that could affect its value or saleability.
The valuation is typically one of the last steps before a lender issues a formal mortgage offer. If the valuation is satisfactory, your application moves forward. If the valuer identifies problems or values the property lower than expected, it can complicate or even derail the process.
Types of Mortgage Valuation
There are three main types of valuation used in UK mortgage applications:
- Desktop valuation: The lender uses property databases and algorithms to estimate the value without visiting. Common for remortgages where the loan-to-value is low and the property is standard.
- Drive-by valuation: A surveyor visits the area and views the exterior of the property but doesn't go inside. This provides more information than a desktop valuation but is less thorough than a full inspection.
- Physical valuation: A qualified surveyor visits the property and inspects both the interior and exterior. This is the most thorough option and is more common for higher loan-to-value applications or unusual properties.
The type of valuation used is at the lender's discretion. For straightforward remortgages with plenty of equity, a desktop or drive-by valuation may be sufficient.
What the Valuer Looks For
During a physical valuation, the surveyor assesses the property's general condition, construction type, number of rooms, any obvious defects, and the local area. They compare it against recent sales of similar properties nearby to arrive at a market value figure.
The valuation report is brief and doesn't provide the detail of a full homebuyer's survey. It may note significant issues — such as subsidence, Japanese knotweed, or non-standard construction — that could affect the lender's willingness to proceed. If you want a thorough assessment of the property's condition, you'll need to commission a separate survey at your own cost.
How Much Does a Mortgage Valuation Cost?
Mortgage valuation fees vary depending on the property's value and the type of valuation. They typically range from £150 to £600, with higher-value properties costing more. Many remortgage deals include a free valuation as an incentive, so check whether this is part of your chosen product.
Even if you pay for the valuation, remember that it's prepared for the lender, not for you. You may receive a copy, but it's not designed to give you a comprehensive picture of the property's condition. If you're concerned about the state of the property, a homebuyer's report or full building survey is a worthwhile additional investment.
Important: Your home may be repossessed if you do not keep up repayments on your mortgage. There will be a fee for mortgage advice. The actual rate available will depend on your circumstances. Think carefully before securing other debts against your home.