Valuations costing up to £1,000

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by Kay Murchie

Borrowers are being forced to pay for expensive property valuations by their mortgage broker. In some instances, valuations cost the lender just £20.

Those purchasing a property are content with paying for full valuations if they feel that their home is worth the money. However, if they are switching to a new lender or staying where they are, a valuation is pretty worthless.

It is highly likely that a new lender will insist on a valuation costing around £1,000. Even if there is hardly any risk to the lender, a valuation could still be required.

Some re-mortgage deals do not charge valuation fees but could be within the arrangement fee, therefore, borrowers would need to be cautious and work out which method benefit them.

The valuation process usually doesn’t involve any work - it’s just another way of a lender making a profit. Commission can be anything up to £345 for administration fees and the valuer also receives an amount.

One example is a homeowner re-mortgaging a £250,000 property -even if they borrowed a small amount, they could still pay around £600 to £800 in valuation fees.

An increasing amount of valuations are done by computer, they calculate the value of a home using data such as features of an individual property, the sales process and house prices from nearby areas. This can cost as little as £20.