Assessing the true cost of a survey

There are currently a huge number of questions on the lips of potential buyers everywhere including how house prices will be affected by recent market instability, where mortgage rates may end up, how the string of Bank of England base rate rises are impacting their borrowing requirements and how much they can actually borrow.

Quite rightly, mortgage advisers are often the first port of call for such questions and I don’t need to tell you how much information and reassurance borrowers need in a stable economic environment, never mind one in which so much uncertainly continues to linger. This is particularly apparent for first-time buyers who can easily be bamboozled by such a daunting, complex and often onerous process.

These questions do not stop once the purchase decision has been made and one of the most pressing questions to arise post offer concerns the valuation and the survey. This is an area which generates plenty of misconceptions. Late last year, a webinar poll conducted by Countrywide Surveying Services highlighted that four out of five consumers still confuse a mortgage valuation with a survey.

When asked the question – is the mortgage valuation still thought of as a survey? An overwhelming 80% of respondents believed this to be the case, with only 20% disagreeing with the statement. Despite mortgage surveys being a staple component within residential lending, they remain misunderstood and much maligned. This data, alongside regular anecdotal feedback we receive, indicates that there are still a worryingly large number of people relying on a mortgage valuation to uncover any issues with the property they are looking to purchase.

Due to a lack of awareness around its importance, a survey can often be viewed as an additional cost rather than an integral one. The thing homebuyers need to bear in mind is that opting for the right survey could actually save them time, money and heartache. The cost can often be a fraction of the potential expense from work which needs to be completed on the property which was not identified before contracts are signed.

In short, all too many buyers who haven’t sourced the right level of information or received the right advice are leaving themselves in a precarious position and open to potentially damaging financial consequences if unexpected and expensive issues arise post-completion. After all, the more information purchasers receive upfront, the less likely it is that unforeseen complications will arise further down the line.

This is an education gap which must be addressed as early as possible in the homebuying process as surveys are a vital component in helping to protect and generate valuable piece of mind for what is usually the largest financial decision that people will make over the course of their lifetimes.

This underlines how important it is for mortgage intermediaries to include relevant information about surveys and valuations in the advice process and help their clients to understand an often misunderstood part of the homebuying journey. And this is especially relevant in a time when concerns remain over the direction of house prices, meaning homebuyers need to ensure they are both comfortable with the value of the property and any potential outlay and costs which may, or may not, arise.