50% of people don’t know difference between a property valuation and a structural survey
“For a country with one of the highest level of home ownership in Europe the lack of knowledge around valuations and mortgages is worrying”
Sunday 1st November 2015. According to a new survey one in four Irish people don’t know that a property valuation is required to be completed before the drawdown of a mortgage.
The survey, which was commissioned by the Society of Chartered Surveyors Ireland and carried out by REDC, also found that 50% of people don’t know the difference between a property valuation and a structural survey.
A property valuation, which is required by the banks before they release funds to homebuyers, is an opinion of the property’s market value at that time. It does not include information on the structural condition of the fabric of the building.
The survey of over 1,000 people also found that eighteen to twenty four year olds and people in lower economic social groupings are less aware that a property valuation is required before a mortgage can be received.
Patricia Byron, the Director General of the SCSI described the findings as worrying.
“For a country with one of the highest level of home ownership in Europe the lack of knowledge around valuations and mortgages is a major concern and needs to be addressed. Buying a home is the biggest purchase most people make in their lives and they need to ensure they are making an informed decision”
“While valuation surveys are required by the banks, people must realise they come with an important caveat. The valuation survey is an opinion of its market value at that time; prospective buyers need to have a full structural survey carried out in order to identify any potential structural defects , to ensure no potentially hazardous material has not been used in its construction and to ensure it complies with fire safety regulations.
Given the financial commitment involved in a home purchase – and whether it’s for valuation survey or a structural survey – we would advise homeowners to ensure the survey is carried out to international best practice by a chartered surveyor” Ms Byron said.
The survey also found there was confusion over who pays for the valuation survey. Ms Byron said this was because some banks pay for it while other do not.
Ms Byron said the survey raised serious questions about Irish people’s financial literacy.
“We strongly believe the education system needs to address the knowledge deficit in this area. One option might be the introduction of a compulsory personal finance module at secondary level” Ms Byron concluded.