It is not unusual for a mortgage valuation and an independent RICS valuation to produce different figures.
This does not necessarily mean that one valuation is incorrect. The two valuations may have different purposes, scopes and assumptions.
What is a mortgage valuation?
A mortgage valuation is primarily undertaken for the lender.
Its purpose is generally to assess whether the property provides suitable security for the proposed lending.
It is not the same as a detailed building survey or necessarily an independent valuation commissioned by the property owner.
What is a RICS valuation?
A RICS valuation is undertaken for a defined purpose and in accordance with the relevant valuation requirements.
The valuation considers appropriate evidence and the circumstances of the instruction.
Different purposes can therefore result in different valuation requirements.
Why might the figures differ?
Factors can include:
- Different comparable evidence
- Different valuation dates
- The purpose of the valuation
- Property condition
- Assumptions made
- Market changes
- Different available information
A mortgage valuation should therefore not automatically be treated as a definitive statement of the property’s market value for every purpose.
What should I do if I disagree with a valuation?
First establish why the valuation was undertaken and what basis was used.
If a formal independent valuation is required, an appropriately qualified surveyor can review the property and relevant market evidence for the specific purpose.
Stokemont’s advice
Property valuation is purpose-specific. A figure produced for one purpose should not automatically be substituted for a valuation required for another.
Stokemont provides independent property valuations for a range of purposes and can advise on the appropriate scope of instruction.
