What is a Loan Security Valuation?

You may need to approach a financial institution to ask for a loan. In this case, you may be asked to offer security in the form of your residential property.

An accurate and comprehensive loan valuation on your property enables banks and other financial institutions to make an informed decision on whether any loan they make to you will be secure. 

Obtaining a valuation by an experienced professional is essential. Banks and other lenders will only consider a valuation report prepared in accordance with European Standards (Recognised European Valuer – TEGOVA) or the Royal Institution of Chartered Surveyors’ (RICS – Red Book).

A good valuation takes into the property’s location, the condition and the quality of the construction, whether there is any demand/supply in the area for this kind of property and what the current market conditions are in the area. Other considerations if there is a tenant and the consequences on the market value, if there is any planning permission in place which will affect its future value, how energy efficient is the building, and whether the property is sustainable over the period of the loan, amongst other things.

If you’re considering raising money and need a loan security valuation, you should approach an experienced and professional RICS-qualified chartered surveyor who has undergone thorough training and has enhanced their knowledge through a regular programme of Continuing Professional Development (CPD). This will not only give you peace of mind that the figure they arrive at is accurate and validated by RICS, but also that, should something go wrong further down the line, they have professional indemnity which will offer legal protection.