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What is the Mortgage Valuation? 

The valuation plays an important role within the mortgage process, and is required to determine whether the property is to be viable security for the funds the lender is loaning. This helps the lender ensure that they are lending the correct amount of funds in accordance with the valuation and the current market conditions. 
 
The valuation is a short document which provides a brief summary about the type of property, the various services that are in place and whether there are any essential repairs required for mortgage purposes. For example, the property may require significant damp proofing works and the lender may only agree to lend the funds if the remedial works are carried out prior to Completion of the purchase. The lender may wish to make this a condition of the mortgage offer and would only release the mortgage advance in the event that the same have been adequately dealt with. If the same are not dealt with, the lender can agree to withdraw their offer. See our Preston solicitors’ blog which discusses other circumstances in which the mortgage offer may be withdrawn, here
 
In agreeing to lend the mortgage funds, the lender is undertaking a level of financial risk and, therefore, the valuation is for their benefit and plays an important role in their decision to make an offer to the prospective purchaser. 
 
As you will see, the valuation is very different to a Home Buyers or full structural survey and our Preston solicitors would always recommend having the same carried out when purchasing a property. The survey would reveal information on the integrity of the property itself and allow any defects to be exposed, that may then be dealt with prior to Completion of the purchase. 
 
The lender’s main concern is that their security over the property is going to be protected and that they are lending the funds to be secured over a suitable property to be mortgaged, that has good title and is marketable. This has, therefore, been a recent issue for banks and building societies to consider, in light of the current COVID-19 restrictions. 

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The Effect of COVID-19 on Mortgage Valuations 

COVID-19 is having significant effect on all of our lives and is something that we are all needing to adapt to, including mortgage lenders. In our blog, last week, our Preston solicitors discussed how the current pandemic is affecting mortgage applications and, this week, we are here to discuss how the same is affecting mortgage valuations. 
 
In normal circumstances, lenders have rigid guidelines that are to be followed within the mortgage process as, of course, they are lending large sums of money which they need to ensure is to be protected. The current times we are in, however, are seeing some lenders relaxing their requirements in terms of mortgage valuations, in order that matters may still progress where possible. 
 
Requirements differ from lender to lender, and this extends to their views on the mortgage valuation. Whilst many lenders, prior to the current outbreak, had already implemented remote, and desktop, valuations, which are carried out without the need for a physical visit to the property, some lenders have, previously, not been as forthcoming in this regard. 
 
Given the current guidelines on social distancing and the ‘lockdown’ state we find ourselves in, such lenders have had no choice but to accept such types of valuation and get on board with the changing needs of their customers. 
 
We are seeing a number of changes being made by mortgage lenders, however, do expect the same to be temporary measures until we have further assurance on how COVID-19 is going to impact us all in the coming weeks and months. 
 
There is still a lot of uncertainty surrounding COVID-19, concerning how long the pandemic will last and, importantly, how different aspects of the conveyancing transaction are to be affected. Our Preston solicitors are, however, following the matter closely. Keep up with our legal news blog for the latest updates. 
 
In the meantime, if you have any conveyancing queries, get in touch with our expert team today, at property@mglegal.co.uk, where one of our local solicitors will be on hand to assist you. 
 
MG Legal; your property solicitors in Preston. 
MG Legal – Your Local Solicitors 
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