Property valuation
A property valuation is an inspection carried out to help determine the current market value of a property.
It is usually undertaken by an estate agent or an independent valuer, typically acting on the instructions of the vendor or a lending institution who are considering funding its purchase. Buyers may also request a property valuation if they are considering purchasing a property, in addition to structural surveys that assess its physical condition.
Before providing a mortgage or refinancing, a lending institution (such as a bank) may request a valuation to ensure the loan can be covered by the security value of the property. This is gives them with the confidence to lend the capital, knowing that if the mortgage goes unpaid, they can recover any outstanding amount by re-selling the property.
Preferred licensed property valuers tend to be used by lending institutions. Estate agents tend to conduct property valuations for sellers of the property. The valuation provided by an estate agent and that provided by a licensed valuer may be different. This is because estate agents are working for the vendor (i.e. the seller), and receive commission based on the price that the property is sold at. They may, therefore, be more optimistic in their assessment of the property’s worth than a licensed valuer who is legally responsible for the information provided by them, so must produce their valuation based on facts and accurate up-to-date data.
It is important that sellers ensure the property is in as clean and tidy a condition as possible prior to the valuation, as this can have an impact, as can the state and style of decorations, furnishings, and so on.
A property valuation is typically produced as a report and, in addition to photographs and plans, may contain the following information:
- Age of the property.
- A description of the construction.
- Size of the land and building.
- Room layouts and measurements
- Details of fixtures and fittings.
- Physical condition, wear and tear, etc.
- Details of any issues that need addressing (such as cracking, subsidence, etc.).
- Any improvements that have been made (e.g. block-paved driveway, house extension, etc.).
- Comparative sales in the area.
- Use class and extant permissions such as planning permission.
- Development plans that might change the value of the property in the future.
In order for the valuation to be as fair and accurate as possible, a property will typically be compared with other similar properties in the local area. Valuers will examine planning restrictions, by-laws, council zoning, and so on. Factors such as local infrastructure, reputation and attractiveness of the neighbourhood, market demand, and amenities (e.g. schools, hospitals, green spaces, and so on), will also be taken into consideration.
Valuers also refer to data provided by the Land Registry, which updates house prices across different areas on a monthly basis.
[edit] Related articles on Designing Buildings Wiki
- Caveat emptor.
- Condition Report.
- Difference between existing use value and market value.
- Estate agent.
- Existing use value.
- Funding options.
- Gross development value.
- Homebuyer Report.
- Investment Property Databank (IPD).
- Land Registry.
- Property development finance.
- Property market.
- Reservation agreement.
- Residual valuation of land.
- Site appraisals.
- Site surveys.
- Vendor survey.
- What is a valuer?
Featured articles and news
RTPI leader to become new CIOB Chief Executive Officer
Dr Victoria Hills MRTPI, FICE to take over after Caroline Gumble’s departure.
Social and affordable housing, a long term plan for delivery
The “Delivering a Decade of Renewal for Social and Affordable Housing” strategy sets out future path.
A change to adoptive architecture
Effects of global weather warming on architectural detailing, material choice and human interaction.
The proposed publicly owned and backed subsidiary of Homes England, to facilitate new homes.
How big is the problem and what can we do to mitigate the effects?
Overheating guidance and tools for building designers
A number of cool guides to help with the heat.
The UK's Modern Industrial Strategy: A 10 year plan
Previous consultation criticism, current key elements and general support with some persisting reservations.
Building Safety Regulator reforms
New roles, new staff and a new fast track service pave the way for a single construction regulator.
Architectural Technologist CPDs and Communications
CIAT CPD… and how you can do it!
Cooling centres and cool spaces
Managing extreme heat in cities by directing the public to places for heat stress relief and water sources.
Winter gardens: A brief history and warm variations
Extending the season with glass in different forms and terms.
Restoring Great Yarmouth's Winter Gardens
Transforming one of the least sustainable constructions imaginable.
Construction Skills Mission Board launch sector drive
Newly formed government and industry collaboration set strategy for recruiting an additional 100,000 construction workers a year.
New Architects Code comes into effect in September 2025
ARB Architects Code of Conduct and Practice available with ongoing consultation regarding guidance.
Welsh Skills Body (Medr) launches ambitious plan
The new skills body brings together funding and regulation of tertiary education and research for the devolved nation.
Paul Gandy FCIOB announced as next CIOB President
Former Tilbury Douglas CEO takes helm.
UK Infrastructure: A 10 Year Strategy. In brief with reactions
With the National Infrastructure and Service Transformation Authority (NISTA).