When buying a property with a mortgage the lender will insist on inspecting the property before issuing you with a mortgage offer.
Here we will briefly explain the different types of survey:
Lender’s Valuation Report (Level 1)
This is the cheapest and most basic type of property inspection. It is required by all mortgage lenders but it is not a survey.
This Level 1 valuation inspection will pick up major defects but it’s primary purpose is to establish the current value of the property in relation to its condition and intended usage. The mortgage provider will want to know if the property is valuable enough to secure your loan against. This is a deciding factor in whether your mortgage application is approved.
Though you may pay for the report, you may not get a copy or even see what the surveyor has written. The valuation is based on the surveyor’s knowledge of comparable prices in the locality. It may also give a minimum reinstatement value, which is the amount of money it would take to completely rebuild the property, should it ever be necessary.
Your lender will arrange an inspection with a qualified surveyor who is approved by the lender to undertake this type of work.
Homebuyer’s Report (Level 2)
You can elect to have a Level 2 Homebuyer’s Report and this will be more expensive than the basic Level 1 valuation.
You can choose to use the lender’s Surveyor and ‘upgrade’ his inspection to include the elements of the Homebuyer’s Report or alternatively instruct another surveyor of your choice.
This survey is more detailed than a valuation for lending purposes and will include a report just for the borrowers on the state of the property. The homebuyer report will not list every single aspect of the property, but it can reveal problems which need further investigation. The report will include all major sections of a property that are visible to the surveyor. However, they will not lift up flooring or carpets and will be unable to inspect the wiring.
We would suggest that this survey is not very appropriate for properties of a non-standard design or construction.
The Building Survey (Level 3)
Also known as a full structural survey it is the most extensive (and expensive) type of survey.
If the property you are buying is relatively new and in very good condition a Level 3 full structural survey may be a bit excessive and so a Level 2 Homebuyer’s may be more suitable.
However, if the property is quite old, has had major building work done or is structurally unsound we would always suggest the full building survey.
It is not unusual for the surveyor to spend a few hours inspecting the property depending on its size.
The Remortgage Survey
When you remortgage you move your mortgage to a new lender but stay in the same property. As you live there already the new lender can be a bit more relaxed regarding the condition and value of the property.
It’s possible that they will send a surveyor to visit the property. However, it is also possible that they just use comparable property sales data to confirm an approximate value without needing to see the property.