Can a mortgaged buyer not have a survey/valuation?

BikingBud

Shock horror - lenders don't care about the house they care about the purchaser protecting their investment.

The loan offer will usually have an indication of the level of insurance, house value and type of event, that is required that covers the lender's risk.

No point expending too much effort and diluting the profits.

Roy1234

BikingBud said:

Shock horror - lenders don't care about the house they care about the purchaser protecting their investment.

The loan offer will usually have an indication of the level of insurance, house value and type of event, that is required that covers the lender's risk.

No point expending too much effort and diluting the profits.

I don't doubt that the lenders only care about protecting their loan/investment.  I guess the question that must follow is, did they care more 30 years ago?  No first time buyer at least (high LTV) got a house without a basic inspection inside & out back then.  Has the financial industry become more hard-faced, despite the lessons on the 2008 credit crunch and the easy lending that caused it?

se2020

I think house prices are well over the actual value of the house.

Example: we are currently trying to buy a house.
Price is £450,000.
Valuation survey carried out, only comment on that was "good condition for age"
(The place is 250yrs old!)

The total valuation report was 12 pages, 3 of gumph, the rest comparing the price to other local houses, market conditions and epc reports.

Most importantly,  the 'rebuild cost' was £115,000.
So, basically, the actual house is only 'worth' £115k.
If it all falls down / burns down on day one the lender is fine as our deposit is over £115k. So, worst case, they would still get all their money back if they sold the plot at auction. 
It's a condition of the mortgage that it's all insured anyway.
Interestingly,  the insurance quotes don't require any type of survey either although I believe some companies offer cheaper policies if a survey is done. This is probably because the house is so old. I don't expect they would bother on a newer one?

user1977

Roy1234 said:

BikingBud said:

Shock horror - lenders don't care about the house they care about the purchaser protecting their investment.

The loan offer will usually have an indication of the level of insurance, house value and type of event, that is required that covers the lender's risk.

No point expending too much effort and diluting the profits.

Has the financial industry become more hard-faced, despite the lessons on the 2008 credit crunch and the easy lending that caused it?

The credit crunch wasn't caused by houses being unexpectedly wonky. To the extent any of it was due to valuation issues, it was the misplaced belief that prices would carry on soaring higher, nothing to do with the actual condition of properties.

As for why it's changed, I expect much of it is because there are better tools these days for getting info about properties and comparables (for example, don't underestimate how much use surveyors and lawyers make of Google Street View).

Gentoo365

When I last bought a house the lender approved without a surveyor visit. This isn't new, I know that banks can request a valuation electronically, providing some details of the property and they receive a response back electronically. 

This will be done if the LTV is within some range, loan value is within some range and and there is enough information about the property.

.. anyway yes, I had my offer without a surveyor. But just to be sure for my own benefit I arranged one independently to get a homebuyer report and a valuation (the banks don't divulge theirs as they know it's just an estimate)

Albermarle

newsgroupmonkey_ said:

Albermarle said:

newsgroupmonkey_ said:

Roy1234 said:

anselld said:

Some lenders to drive-by surveys, some even do desktop surveys.  They still charge the full survey fee of course but they dont necessarily have to actually show up.

Aren't they worried that major faults could lurk inside, and so the property not be worth what they've lent if they ever had to repossess & sell?  Wasn't the lending market tightened up after the casual lending of the credit crunch 2008?

That survey is only for the lender to make their decision on. Surveyors know whether it's non-traditional or if there are underlying area issues.

As far as the bank is concerned, they look at the big picture and the risk.
If you want to know if the house is going to fall down, you need your own proper survey.

Usually anything relatively modern, 75% or less LTV, will be a desktop or a drive-by.

Also it helps if the property is in a normal residential street/location.

Fair point. This is assuming that the Google car has popped by.

Also a house will be seen as easier to sell, if it is in a normal residential area, near shops, schools etc., as opposed to being in the middle of nowhere or in a well known dodgy area. 

AskAsk

gazfocus said:

I must admit, I do find it bizarre that lenders will lend potentially hundreds of thousands on a house without seeing it first, however, I guess it’s important to remember that if all goes belly up and the house falls down, it’s ultimately the buyer on the hook and if they don’t have adequate insurance they are still duty bound to make the mortgage payments for a house that no longer exists…now, whether they will or not is anyone’s guess. 

in the UK, particularly the south east, the land is worth much more than the property, so in london for example, the property rebuild cost may only be £250k but the property value is £900k - £1m

so if the loan is only 500k, they will be protected even if they only got the land.