I was interested to read last week that the council of the Residential Property Surveyors Association has written to Hector Sants, chief executive of the Financial Services Authority, calling for an investigation into the advice mortgage lenders give their borrowers.
The RPSA claims only one in five home buyers obtain a survey or condition report on the property they are buying – yet 80% of home buyers believe that they get a survey.
It says the main reason for the discrepancy is that most mortgage borrowers believe their lenders’ valuation is a survey.
It could be said that lenders should be clearer about the service they offer.
I’ve got examples from two of the major lenders in the UK, Abbey and Halifax.
Here’s the first from Abbey – “A ’Valuation for Mortgage Purposes’ will be carried out by Abbey as your mortgage lender. You may also want to have a more detailed Home Buyers survey carried out for your own peace of mind, especially if the property is old or run down.”
And here’s the second from Halifax – “When you’ve found the home you want you’ll need to know what it’s really worth. You can find out for sure by arranging a valuation or survey before you make your offer.
“Halifax will get a valuation for the property you want to buy, but if you want a closer examination, for added peace of mind, we can help arrange a survey for you.
“A valuation is an inspection of the property to ascertain its acceptability to the lender as security against the mortgage loan, for which the borrower may have to pay. We always carry out what we call a level one Halifax valuation report. If you prefer, you can request a more detailed valuation or survey.”
I think both lenders, and the above are just two examples, could do more to highlight what the valuation report actually does and does not.
But it should also be clear the public should not all be thought of as stupid and that they choose based on their wallets, not the title of the report. Neither lender calls a valuation a survey.