How Does a Surveyor Value a Property?
(Last Updated: 11/10/2022)
11/10/2022
143
7 min read
When selling your property, there are different procedures you must go through to complete the sale.
A valuation report is a necessary step, regardless of whether you're acting as buyer or seller, although it can be useful in different contexts too. It gives you an accurate reflection of what a property's value is so that you can either establish a correct selling price, or make sure you are paying a realistic one.
There are different types of surveys you can get for a property and they each have their own purpose. For this type specifically, you will need a valuation surveyor. So, what does a valuation surveyor do and how does a surveyor value a property?
What do surveyors look for when valuing a house?
When valuing your home, a surveyor will make a physical inspection of the property and put together a thorough report based on their findings. Any factor that can increase the value of your house (or devalue it) will be inspected so that the estimated price is accurate. Areas subject to investigation are:
- 1
Location
A property's location is an important factor when estimating a house price. Being well served by public transport and being near local shops and amenities can heavily influence the valuation report. For example, owning a property near a good local school can increase its value.
- 2
Property description
This usually includes a general description of the property, such as how many storeys it has or the date when it was built. The report will also include a brief appreciation of how the property has been maintained.
- 3
Accommodation
The property type and the number of bedrooms it has are also factors that heavily influence the price. In this section, your surveyor will make a note of the layout of the house, as well as take measurements of the property. These measurements are usually approximate and they are done in accordance with standards imposed by the Royal Institution of Chartered Surveyors (RICS).
- 4
Services
This includes utilities, such as gas, water and electricity. In accordance with a RICS guide, surveyors will only inspect the visible parts of these services and will not carry out any special tests to prove their viability. That is due to the fact that, in most cases, these are incorporated into the construction of the property.
- 5
Property condition
This section shows a more in depth description of the house. You can request for certain aspects to not be investigated as part of your valuation report.
The owner is responsible to present the surveyor with any relevant information about the property. Verbal enquiries will be made where necessary. If certain areas of the property are not accessible, they will not be inspected and will either be presumed to be in good condition, or will be noted in a "Limitations" section.
- 6
Type of tenure
Leasehold properties tend to be cheaper than freehold ones, so a valuation report will also take this into consideration. The property title will be investigated to check for any charges or restrictions placed on the property.
- 7
Planning
A valuation report is done under the premise that the property already complies with all building regulations. As a result, it is the owner's responsibility to make sure that they have proof of all planning details and certificates.
- 8
Market analysis
An estimated price will be set based on sales of similar properties in the area. A valuation report will take the average price into consideration but will use previous sales as a factor when increasing or decreasing the value of yours. Neighbouring properties being sold for less or more than what they're worth can impact your home's selling price.
- 9
Valuation
Based on the analysis of all factors listed above, the surveyor will make an estimate of the market value of your property.
If you're using a mortgage to buy your property, your lender will do a mortgage valuation. This is meant to determine the real value of the property and it is usually paid for by the borrower, although its purpose is to serve the mortgage lender. The cost can sometimes be included in the mortgage product.
A mortgage valuation is not a property survey, and it is done for the benefit of the lender. It is recommended you get an independent valuation survey done.
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What makes a house lose value?
- Poor maintenance of a property - this can lead to structural damages to the house in time, which will significantly affect the estimated price
- Neighbourhood - location, as previously mentioned, is also essential when estimating a price. The state of surrounding properties will influence their selling price, which will in turn have an effect on yours. In addition, not having access to local shops will also devalue your property.
- Potential risks - these are also factors that need to be considered. Simply being flagged as having a potential risk is enough for the price to decrease.
- Market conditions - Shifts in the market, such as base rate going up, or COVID, can also decrease the value of a house.
- Local developments - You can check local planning applications in your area and determine how these will affect the value of your home.
The advantage is there are certain steps you can take to increase the value of a property. If the house has been used as a residential one, chances are you would have made some improvements to it throughout your stay there. Certain home improvements can increase the value of your home.
Are surveyors valuations accurate?
Yes, most surveyor valuations are accurate. A valuation report is meant to realistically reflect what a property is worth and this is done by doing an analysis of all factors that can affect the price.
When valuing a property, your surveyor will take both internal and external factors into consideration. In this case, internal factors refer to property description, number of bedrooms and storeys, as well as services it benefits from. External factors refer to the neighbourhood, proximity to local amenities and perceived risks.
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Written by:
Laura Cristian
Laura has a talent for data analysis and fact-finding. She is an advertising graduate with a broad range of skills in the web marketing field within conveyancing sector. She works closely with our panel of solicitors and surveyors to understand our clients' needs and challenges and to write the most valuable content for you.
Reviewed by:
Andrew Boast
Andrew started his career in 2000 working within conveyancing solicitor firms and grew hands-on knowledge of a wide variety of conveyancing challenges and solutions. After helping in excess of 50,000 clients in his career, he uses all this experience within his article writing for SAM, mainstream media and his self published book How to Buy a House Without Killing Anyone.
