MRT1 LO11: Valuations, RICS Home Surveys and consumer rights

A mortgage valuation and a survey are not the same thing. The valuation is for the lender, to decide whether the property is good security. A survey is for the buyer, to find out about the condition of the home. LO11 of the CeMAP® MRT1 unit asks you to know the forms of valuation and survey, which suits which property and customer, what lenders require, and the consumer's rights.

1. Forms of valuation and survey (AC11.1)

The lender's mortgage valuation

Feature	Detail
Who it is for	The lender. The borrower usually pays the valuation fee, but the report is prepared for the lender's lending decision.
What it covers	Market value, suitability as security, a reinstatement (rebuild) figure for insurance, and any obvious defects, risks or retentions
Inspection	Limited. The valuer does not move furniture, lift floors or test services.
Standards	Valuations for secured lending are carried out under the RICS valuation standards (the "Red Book") by qualified valuers
Variants	Full physical inspection; external-only ("drive-by") inspection; desktop valuation; or an automated valuation model (AVM), which uses data on comparable sales and is common for low-LTV remortgages

A mortgage valuation is not a survey. A satisfactory valuation does not mean the property is free of defects.

RICS Home Survey levels

The RICS Home Survey Standard (first edition, effective 1 March 2021) sets three levels of service for residential surveys. A second edition is planned but not yet published.

Level	Name	What it gives	Suits
Level 1	Condition report	The most basic: a description of the condition of the main parts of the property, with condition ratings and a summary of risks, but no advice on repairs and normally no valuation	Conventional, modern homes in reasonable condition
Level 2	Survey (previously known as the HomeBuyer Report)	A more detailed inspection with condition ratings, advice on defects and repairs and ongoing maintenance; available with or without a valuation	Conventional homes built from common materials, in reasonable condition
Level 3	Building survey	The most detailed: a thorough inspection, the likely causes of defects, repair options and often costs	Older, larger, listed, unusual or altered properties, or those in poor condition or planned for major works

Condition ratings in Levels 1 and 2 typically run from 1 (no repair needed) to 3 (defects that are serious or need urgent repair or replacement), with "not inspected" where access was not possible.

Choosing the right level

Customer and property	Sensible choice
First-time buyer, 1990s semi, good condition	Level 1 or Level 2
Typical family home of standard construction	Level 2
Victorian terrace with extensions	Level 3
Listed or thatched cottage	Level 3, possibly with specialist reports
Buyer planning major renovation	Level 3
New-build home with warranty	Snagging inspection; Level 1 or 2 if desired