find out what your property is worth

How accurate are online property valuation tools compared to a formal surveyor valuation?

Online property valuation tools can be relatively accurate. They are underpinned by last sold prices in the local area for comparable properties, which is similar to what a surveyor will do when valuing a particular property.

Where they can fall down is if you have completed an extension on a property or generally increased the floor space – perhaps putting an extra bedroom in. An online valuation tool would not be particularly accurate in this scenario because it cannot account for the increased space you have created.

An online valuation will also not necessarily take into account the present condition of the property. A formal surveyor actually visits the property, which allows them to take the condition into account.

Why do mortgage lenders require their own property valuation, and how does it differ from an estate agent’s estimate?

A mortgage lender will always require their own property valuation and will not necessarily go off what the estate agent is marketing the property for.

An estate agent’s main objective is to get the best result for the vendor, which naturally means highlighting the property’s best features to aim for a strong price. However, property valuations can vary significantly between agents and lenders due to differing assessment methods or local market views.

A mortgage lender will err more on the side of caution. They consider what they would value the property at if they needed to sell it at a reasonable price. This means there can be a disparity between an estate agent’s estimate and a mortgage lender’s valuation. They are simply looking at the property from different points of view.

When you are purchasing a property, the valuation is often accepted at the price you are buying for. This only tends to be an issue if it is very out of kilter or if there is a particular problem with the property.

What factors can cause a lender’s valuation to come in lower than expected, and what can you do about it?

A lower-than-expected valuation can happen due to local market conditions or the property’s condition. Structural concerns and recent nearby sales supporting a lower valuation are common causes.

If this occurs, you might be able to challenge the valuation or renegotiate the purchase price with the vendor. Alternatively, you could increase your deposit or explore alternative lenders. You can also arrange for a different surveyor to visit the property. As a mortgage broker, we can talk you through these various options and their likely results.

Is there a difference between a valuation for mortgage purposes and a homebuyer’s survey?

There is a difference between a valuation for mortgage purposes and a homebuyer’s survey. A mortgage valuation is purely for the lender to check if they will lend against the property. You would have no comeback against any defects or issues in the property that were overlooked.

Some lenders will not even release the valuation report to the customer because it is just for their purposes. They will tell you what the surveyor has deemed the value, but they will not give you any more information unless they have specific concerns. They will not give you much more information other than whether they will lend on the property.

A homebuyer’s survey is completed for the buyer rather than the mortgage lender. You will get lots of information on the condition of the property and some estimates for what the cost of those repairs would be. If you are buying a property, I would recommend having a homebuyer’s survey done independently. You can then have the mortgage survey completed via the lender.

Making mortgages easy for you

Windsor Hill works closely with individuals considering a mortgage to help them make an informed decision based on individual needs and circumstances.

Speak to one of our expert team members today to help you with your mortgage requirements at 01225 962 456 or email info@windsorhillmortgages.co.uk

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