Property Valuation Report vs. Home Survey: What’s the Difference?
When navigating the complex world of property transactions, you’ll encounter various professional services designed to protect your investment. Two of the most commonly confused are property valuation reports and home surveys. Though they might sound similar, they serve distinctly different purposes, and understanding these differences could save you significant headaches (and money) down the line.
Let’s demystify these essential property services to help you make informed decisions about which you need and when.
The Basics: Purpose and Function
Property Valuation Report
A property valuation report does what its name suggests—it provides a professional opinion on how much a property is worth in the current market. Conducted by qualified valuers, these reports primarily focus on establishing a monetary value for the property.
This assessment takes into account factors like:
● Location and neighbourhood characteristics
● Property size and layout
● Condition (to some extent)
● Recent comparable sales in the area
● Current market trends
The valuation is typically required by mortgage lenders before they approve your loan, as they need assurance that the property provides adequate security for the amount they’re lending. It essentially protects the lender’s investment.
Home Survey
On the other hand, a home survey is all about assessing the property’s condition. Rather than focusing primarily on value, a surveyor will thoroughly inspect the building to identify:
● Structural issues
● Damp problems
● Subsidence
● Necessary repairs
● Potential future maintenance concerns
● Building regulation compliance issues
This inspection protects you, the buyer, by highlighting any problems that might require costly repairs down the line or that might affect your decision to purchase the property at all.
Who Commissions Them and When?
Property Valuation Report
Property valuation reports are most commonly requested by:
● Mortgage lenders (as part of the mortgage application process)
● Homeowners (when remortgaging or for inheritance tax planning)
● Executors of estates (for probate purposes)
● Divorcing couples (for asset division)
They’re typically conducted after the seller accepts an offer before the mortgage is finalised.
Home Survey
Home surveys are usually commissioned by:
● Property buyers (before completing the purchase)
● Property owners (who want to understand potential issues before selling)
● Homeowners (who suspect specific problems and want an expert assessment)
They’re best conducted after the seller accepts your offer but before you exchange contracts, giving you time to renegotiate or withdraw if serious issues are uncovered.
Types and Levels Available
Property Valuation Report
Property valuation reports tend to be relatively standardised, though they can be conducted for different purposes:
● Mortgage valuation (the most basic)
● Help to Buy valuation
● Probate valuation
● Matrimonial valuation (for divorce proceedings)
● Capital gains tax valuation
The methodology remains similar, though the specific requirements vary slightly according to purpose.
Home Survey
Home surveys come in several different levels of detail:
Level 1 – Condition Report
A basic overview of the property’s condition, highlighting urgent defects and potential legal issues without going into extensive detail or providing advice.
Level 2 – Homebuyer Report
More comprehensive than a Condition Report, this identifies obvious problems like damp or subsidence and includes advice on repairs and maintenance.
Level 3 – Building Survey (formerly Full Structural Survey)
The most thorough option, providing an in-depth analysis of the property’s condition, detailed advice on repairs, and estimated costs. This is ideal for older properties, unusual buildings, or if you’re planning major works.
The Professionals: Who Conducts Them?
Property Valuation Report
Property valuation reports are typically conducted by:
● RICS (Royal Institution of Chartered Surveyors) registered valuers
● Valuers working for mortgage lenders
● Independent chartered surveyors specialising in valuations
These professionals focus on market analysis and comparable evidence rather than detailed building inspection.
Home Survey
Home surveys are conducted by:
● Chartered surveyors (usually RICS-registered)
● Specialists in building pathology and construction
● Professionals with extensive knowledge of building regulations and standards
These surveyors are trained to identify defects and assess their significance, often specialising in particular property types or eras.
Common Misconceptions
Perhaps the biggest misconception is that a mortgage valuation provides adequate protection for buyers. Many first-time buyers in particular assume that because the mortgage lender has “surveyed” the property, it must be in good condition.
In reality, the valuer may spend just 15-30 minutes at the property, with their primary concern being whether it’s worth the amount being lent, not whether it’s a good purchase for you.
Do You Need Both?
In most cases involving a mortgage, you’ll need a property valuation report because your lender will require it. However, this should never be considered a substitute for a proper home survey.
For significant investments like property, commissioning a survey is always advisable. The level of survey you choose should depend on:
● The age and condition of the property
● Its construction type
● Any concerns you have about specific issues
● Your plans for the property
● Your tolerance for risk
Making Informed Decisions
Understanding the distinct roles of property valuation reports and home surveys allows you to make better decisions throughout the property buying process.
As property transactions represent some of the largest financial commitments most of us make, it’s well worth investing in both the right valuation for your circumstances and an appropriate survey level to protect your investment for years to come.
