Does using lender's surveyor for full survey increase risk of undervaluation?

moneysavingplumber

We've just made an offer on a 1930s terraced house and are quite hopeful it will be accepted, as we've tried to offer as close to the true market value is as possible.
We're probably going to apply to Britannia for a 5 year fixed mortgage direct at 90% LTV, and despite my obvious experience in the building trade, are planning on erring on the side of caution with a full survey through the lender at £880 due to the age of the property. In peoples' experience, is a full survey by the lender more likely to result in an undervaluation by them and should I just pay the £200 valuation fee to Brit' and stump up the extra cost for a private survey for our own peace of mind?

Thanks in advance.

Wutang_2

yep do it....

Thrugelmir

Could you clarify the purpose of why you thinking of having a seperate valuation done?

moneysavingplumber

Thrugelmir wrote: »

Could you clarify the purpose of why you thinking of having a seperate valuation done?

Not necessarily a separate valuation, just a structural survey, which I know is effectively another valuation, but it's purely to highlight any potential problems that I haven't spotted.

Thrugelmir

moneysavingplumber wrote: »

Not necessarily a separate valuation, just a structural survey, which I know is effectively another valuation, but it's purely to highlight any potential problems that I haven't spotted.

I would only have a structual survey undertaken if you have real concerns regarding the property. As this will highlight matters that potentially could save you £'000's. So, yes it would value the property much lower. However its purpose is to protect you (not reduce the mortgage offer).

moneysavingplumber

Thrugelmir wrote: »

I would only have a structual survey undertaken if you have real concerns regarding the property. As this will highlight matters that potentially could save you £'000's. So, yes it would value the property much lower. However its purpose is to protect you (not reduce the mortgage offer).

Yes I may have my own structural survey done to protect myself. However, if the valuation and structural survey were carried out in one hit by the lender's surveyor, then ultimately it will be done to protect the lender, and the surveyor's own back, and may (hence the OP) reduce the mortgage offer more than if their surveyor purely did a basic valuation.

The question was to ascertain whether my theory has been borne out by people's experience here.

laurel7172

Risk of undervaluation??

Sorry, but isn't having the surveyor come back with a lower price a good thing? I (in my vast house buying experience-not) have always made an offer "subject to survey".

It's a funny old world...

Thrugelmir

moneysavingplumber wrote: »

Yes I may have my own structural survey done to protect myself. However, if the valuation and structural survey were carried out in one hit by the lender's surveyor, then ultimately it will be done to protect the lender, and the surveyor's own back, and may (hence the OP) reduce the mortgage offer more than if their surveyor purely did a basic valuation.

The question was to ascertain whether my theory has been borne out by people's experience here.

Not sure what your objective is. As any issue with the property should result in a renegotiation of the price, ie. lower. Which actually saves you money.

From which I can only assume that there is another motive behind your question.

Even the basic valuation could result in a lower mortgage offer.

moneysavingplumber

laurel7172 wrote: »

Risk of undervaluation??

Sorry, but isn't having the surveyor come back with a lower price a good thing? I (in my vast house buying experience-not) have always made an offer "subject to survey".

It's a funny old world...

If you're a cash buyer perhaps. It's been quite widely reported that many surveyors working on behalf of lenders routinely undervalue by as much as 10% for fear of being sued, should the property be repossesed and the lender not recouping the value it was surveyed at, or the proportionate value in the market at that time.

At 90% LTV, there's no greater LTV available at a higher rate, so an undervaluation would mean either persuading the vendor to drop their price substantially (unlikely given it being a very good property), finding major sums of extra cash to make-up the shortfall (possible but not ideal), or abandoning the purchase. So not really a good thing.

moneysavingplumber

Thrugelmir wrote: »

Not sure what your objective is. As any issue with the property should result in a renegotiation of the price, ie. lower. Which actually saves you money.

From which I can only assume that there is another motive behind your question.

Even the basic valuation could result in a lower mortgage offer.

The objective is to reduce the risk of difficulties purchasing the property due to our chosen lender's chosen surveyor undervaluing the property to cover his own back, that's all.

Thrugelmir

moneysavingplumber wrote: »

The objective is to reduce the risk of difficulties purchasing the property due to our chosen lender's chosen surveyor undervaluing the property to cover his own back, that's all.

The valuer is working for the lender. So will value the property in accordance with any instructions given to him. The valuer wil use professional judgement in valuing the property. Professional people don't normally work on the basis of covering their own backs. If thats all they did they wouldn't last in their choosen professions long.

Would you be happy to overpay for the property?