Banks and other lenders use professional valuers or surveyors to determine a flat's value for mortgage purposes. The valuation process involves:
Comparative analysis: The valuer looks at recent sale prices of similar flats in the same area or building to get an initial sense of the property's value.
Physical inspection: Depending on the type of survey or valuation chosen, the valuer might inspect the flat, considering its size, layout, condition, and any unique features.
Lease considerations: For leasehold flats, the length of the remaining lease can significantly impact value. A shorter lease might reduce the flat's valuation.
Building and location: The condition and location of the building, access to amenities, transport links, and overall desirability of the area can influence valuation.
Potential Issues: The valuer will be on the lookout for any potential problems, such as structural issues, dampness, or problems with the building's cladding or fire safety measures, which can negatively impact the valuation.
It's worth noting that the bank's valuation might not always align with the sale price or a buyer's perception of the flat's value. The valuation is focused on risk assessment for the lender, ensuring they can recover their funds if they ever need to sell the property.