Increasing numbers of lenders are trying to entice cash-strapped first-time buyers with free mortgage valuation surveys. But counting on this basic report without getting a full survey done could be an expensive mistake.
The number of residential mortgage deals being offered with free or refunded valuations has risen 15% over the past year, from 2,906 in March 2022 to 3,338 now, based on Moneyfacts.
But although this means a welcome saving as high as lb1,500, first-time buyers shouldn’t rely on a valuation to confirm the health of the home.
We take particular notice at the rise of free mortgage valuations, and explain why you need to also provide an independent survey done before exchanging on the property.
Free mortgage valuations could save first-time buyers lb1,500
A mortgage valuation involves a fundamental check the rentals are worth roughly what you’ve provided to pay it off, and exists purely for the mortgage lender’s benefit.
The cost of a mortgage valuation is based on the worth and size the home, and could be between lb150 and lb1,500 – so a free valuation can represent a significant saving on the price of your mortgage.
Free valuations was once a lot more normal with remortgage deals, however, many first-time-buyer mortgages now offer this feature, including deals from Barclays and Santander.
What does a home loan valuation involve?
Mortgage valuations in many cases are referred to as ‘valuation surveys’, leading some people to confuse all of them with proper house surveys. However, they're actually very different things.
To conduct a valuation, mortgage lenders will frequently send a surveyor to visit the home to compile a short report. But they will sometimes value your home using recent sales data from the comfort of their computer, or just by driving beyond the outside of the property.
For this reason, a home loan valuation is nowhere near comprehensive enough to take the host to a proper house survey. We'd always recommend commissioning your own independent survey once you’ve had an offer accepted.
David Blake that? Mortgage Advisers said: 'While incentives provided by lenders like a free basic valuation look appealing, it's important to know very well what this type of valuation actually entails.
'These kinds of valuations are purely for the lender’s benefit, to allow it to evaluate whether the property is suitable for mortgage purposes. Often, only the lender gets a copy of the report (even if it’s you who’s paid for it) and it only contains basic information.'
Why should you pay extra for an independent survey?
Most lenders will clearly warn homebuyers that the mortgage valuation is limited and does not meet the same standards as a survey; however, it may be simple to assume you’re getting what you need.
David Blake said: 'When spending a lot, it's vitally important to know should there be any underlying issues with a house.
'In many instances, a basic valuation may not be suitable, especially for older properties or properties in poor condition.
'It's always easier to be safe than sorry – no one wants to find out expensive, unexpected issues once they’ve already moved in.'
What type of house survey should you get?
When you're already setting up lots of money for mortgage fees, stamp duty and conveyancing, a survey can feel like an extra expense that's worth cutting.
But the initial outlay can help you save thousands over time, particularly if the survey accumulates major problems. And if the results are positive or otherwise, they will help you decide whether to proceed with the purchase, and whether or not to ask the seller to repair any problems or lessen the price.
There’s a variety of survey types to select from, and the one you should go for will largely rely on the type of home you’re buying, its age and it is condition.
| Survey type | Cost | Suitable for |
| Condition report | lb400-lb950 | Relatively new properties without any obvious problems – you’ll just get a basic summary of the property’s condition. |
| Homebuyer’s report/Home condition survey | lb450-lb1,000 | Most properties in reasonable condition – you’ll get details of surface-level problems for example damp and subsidence, advice on repairs/maintenance, and often a valuation and rebuild cost. |
| Building/structural survey | lb600-lb1,500 | Older (50+ years) or unusual properties/somewhere you’re planning to renovate – the report will analyse the structure and condition of the property and recommend repairs/maintenance. |
| Snagging survey | lb300-lb600 | New-build properties – a snagging survey will check for everything from minor problems with the finish to deeper, structural issues. |
Get expert advice on mortgages
If you’ve spotted an offer offering a totally free valuation and you’re attempting to understand whether it calculates cheaper than a different mortgage, or just want top tips on the mortgage application, a mortgage adviser can help.
