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.
It claims only one in five homebuyers obtain a survey or condition report on the property they are buying, yet 80% of homebuyers believe that they get a survey.
It says the main reason for the discrepancy is that most mortgage borrowers believe that their lenders’ valuation is a survey.
Lenders it says do little, if anything, to disabuse their customers of this notion, it says because they make so much money out of valuation fees.
It claims lenders put the responsibility on the buyer’s lawyers by way of their lenders handbook and that the clause recommending a survey is buryed in their terms and conditions or letter of engagement which most clients do not read.
Alan Milstein, council member at the RPSA, says: “It is time for lenders to take responsibility for providing their clients with proper advice. They should make it explicit to their borrowers that the valuation they procure is for their purpose alone and says nothing about the condition of the property. They should advise homebuyers to get a survey or condition report and take a written signed instruction to this effect.
“If the only way that lenders will take responsibility is by way of dictate by the FSA then that is what must happen. That is why we as a Council have written to Hector Sants to take urgent action to investigate this issue.”