Mortgage Finance Gazette readers will be very familiar with the traditional role played by surveyors in providing mortgage valuations and the various services provided by surveyors including potential add-ons such as building surveys and homebuyer reports.

These add-ons will be addressed to the purchasers in addition to the mortgage valuation reports sent to the mortgage lenders.

Surveyors may also be required to inspect properties which have been repossessed with a view to providing valuations and marketing advice.

Perhaps less familiar will be the role played by surveyors in advising mortgage lenders when they formulate lending policy in relation to unusual or novel construction types.

All the main mortgage lenders have comprehensive guidance manuals setting out what types of property they will lend on and what types are unacceptable as mortgage security.

These guidance manuals have been produced with the assistance of surveyors using their specialist knowledge of building construction and local property markets.

Brokers and others whose task it is to advise mortgage applicants and place mortgage business would be advised to obtain copies of the guidance manuals provided by the main mortgage lenders because lending policy is not uniform or standardised.

A type of construction which may be declined as unsuitable by one lender may be very acceptable to another. Wasted application fees may be avoided and the irritation of disappointed applicants averted if the suitability of the construction type for the proposed advance is confirmed at the outset.

Experienced surveyors are particularly useful when mortgage lenders need advice on lending policy because they will have specialist construction knowledge and also sufficient local knowledge to confirm if there is a ready market for properties of unusual or peculiar construction.

This is a role I have often undertaken on behalf of mortgage lending clients in the past.

This ol’ house…

Three types of property require careful consideration by mortgage lenders before they can be considered suitable security.

First the very old houses built using timber frames, wattle and daub or cob perhaps dating from as early as the 16^th Century.

Secondly concrete, steel or timber houses built between 1930 and 1960 and typically those constructed by local authorities in the immediate post war period.

Thirdly houses and flats refurbished with cladding, factory assembled using modular construction or built using modern methods of construction.

As regards the very old houses most mainstream lenders will consider these and will typically rely on the individual surveyor’s assessment on a case-by-case basis but the mortgage valuation could be provisional and subject to a specialist’s report on issues such as the structural condition of a timber frame, damp or woodworm.

Building materials

These old houses can be very expensive to maintain, an issue likely to be factored into the valuation. Cob houses are built from dried mud. Wattle and daub construction consists of mud applied to a lightweight framework of very slender timbers.

Surveyors inspecting and valuing such properties need a high level of local knowledge and construction expertise.

In my own locality a special form of cob called Witchert consisting of hardened chalk mud is often found to have been used for the construction of village houses right through to the early 20^th Century and I have surveyed and valued some of these during my career.

At the end of the day what really matters to the mortgage lender is whether the house can be readily sold at a valuation which covers the mortgage debt and this in turn depends to some extent on whether other mortgage lenders are also lending on this type of property in this area.

Former local authority homes

Houses and flats built using pre-cast concrete panels or steel frames clad in steelwork are commonly found on local authority estates throughout the UK mostly dating from the 1950s. These are generally unacceptable as mortgage security as originally constructed although many have passed into private hands as a consequence of the Right-to-Buy scheme.

The owners of these houses are usually aggrieved to find that they cannot sell them or can only sell at a very low price to a cash buyer.

Special repair schemes for these ex-council houses are available, typically replacing concrete panels with brickwork and improving insulation.

Once repaired and upgraded they may then be mortgageable. A surveyor will be able to advise whether any repairs and upgrading undertaken is acceptable.

Typically the main mortgage lenders like to see an estimated life span for the property extending at least 30 years after the end of the mortgage term so if a 30-year mortgage is proposed the surveyor will need to assess the construction and confirm that it should provide at least 60 years life without any major structural interventions.

Modern construction

Another area where expert advice is increasingly required is the very modern construction consisting of houses or flats (and predominately flats) built using factory-assembled components or modular construction. The same applies with older buildings, which may be upgraded with cladding or converted from offices.

With modern methods of construction, and especially the use of newer and relatively untried systems, there is often a conflict between the surveyors who inspect and value these properties and the architects and designers who want to promote new materials and construction methods.

Surveyors are interested in long-term performance, fire safety, adequate provision of outside space and marketability.

As we have seen from the Grenfell enquiry, and the resulting problems faced by the owners of flats with unsuitable cladding, surveyors were right to be sceptical about innovative construction.

And the Covid pandemic has confirmed what surveyors often felt about the long-term value of small flats in high density developments with no outside space.

Whatever the construction mortgage lenders should rest assured that there is a wealth of expertise out there in the form of a surveying profession ready and able to provide the appropriate advice to ensure that their mortgage lending is well secured and the valuations used are robust.

Peter Glover is a chartered surveyor and author of ‘Building Surveys’ and ‘Buying a House or Flat’