Many buyers do not commission their own survey. They pay the lender's valuation fee, see the figure come back at the purchase price, and proceed. When a defect appears later, the first question is whether the person who produced that valuation owed them anything at all.
What a mortgage valuation is
A mortgage valuation is an inspection carried out for the lender, to confirm that the property is adequate security for the loan. It is short — often twenty minutes — and its purpose is a figure, not a condition report. The valuer's contract is with the lender, and the lender's interest is different from yours: they want to know the property can be sold for enough to repay the loan, not whether you will be happy living in it.
Increasingly, lenders use desktop or automated valuations with no physical inspection at all. Where no one visited the property, there is nothing to have inspected negligently; a claim against a valuer is a claim about what a competent inspection should have revealed.
When the valuer owes the buyer a duty
The starting point is Yianni v Edwin Evans & Sons (1982), where the court held that a valuer instructed by a building society owed a duty of care to the buyers of a modest house, because the valuer knew the buyers would probably rely on the valuation rather than commission their own survey.
The House of Lords confirmed and explained the principle in Smith v Eric S Bush (1990). The valuer of a modest domestic property, paid for by the buyer's fee and knowing that most buyers in that market rely on the lender's valuation, owes the buyer a duty of care. The disclaimer the valuer had used — stating that no responsibility was accepted to the buyer — was subject to the reasonableness test under s.2(2) of the Unfair Contract Terms Act 1977, and failed it: the buyer had no realistic choice, the fee was paid, and the risk was one the valuer could insure against.
The duty has limits, and they come from the same case. The reasoning applied to modest houses bought by people of modest means, where it is well known that buyers rely on the valuation. It does not necessarily extend to expensive properties, commercial property, or buyers who could be expected to obtain their own advice. And the content of the duty is to carry out the valuation competently — not to carry out a survey.
Buy-to-let and investors
In Scullion v Bank of Scotland (2011) the Court of Appeal held that a valuer instructed by a lender on a buy-to-let purchase did not owe a duty to the investor-buyer. The reasoning was that buy-to-let investors are commercial purchasers who can be expected to obtain their own advice, and the valuer could not be taken to have assumed responsibility to them. If you bought as an investment, a claim against the lender's valuer will be difficult; your route, if any, is against a surveyor you instructed yourself.
What a competent valuation involves
Because the duty is measured against the valuation task, the question is what a reasonably competent valuer would have noticed in that inspection and reflected in the figure. Obvious, significant defects — active damp, a roof at the end of its life, visible structural cracking, Japanese knotweed in the garden — are the kind of thing a valuer should see and should either reflect in the valuation, flag to the lender as a condition, or note as requiring further investigation before lending. Subtle defects, defects concealed behind furniture, or matters that would only emerge on a Level 3 inspection are not.
There is a second question: did you actually see and rely on the valuation? Some lenders send the buyer a copy; some do not. If you never saw the figure, or the lender's decision to lend was the only thing you relied on, the causation argument becomes harder. Keep the mortgage offer, the valuation report if you received one, and any correspondence about it.
If you paid for a survey through the lender
Many lenders offer a Level 2 survey (with or without valuation) at the same time as the mortgage valuation, carried out by the same panel surveyor. If you chose that product and paid for it, the survey element is a service to you, with the duties described in what your survey had to find. Do not let the surveyor's firm characterise it as "just the lender's valuation". The terms of engagement and the invoice will show what you bought.
Limitation
The same rules apply as for any surveyor claim: six years from the negligent act, or three years from the date of knowledge if later, subject to a fifteen-year longstop — see Am I too late?. For a valuation, the date of the negligent act is the date of the valuation; your loss is generally treated as occurring when you completed the purchase in reliance on it.
What a solicitor will want from you
- The mortgage offer and any copy of the valuation report you received.
- The fee you paid for the valuation and any paperwork describing it.
- Confirmation of whether you bought as a home or an investment.
- Whether you had any other survey or advice before exchange.
- Evidence of the defect, when you found it, and an independent view on whether it should have been apparent on a valuation inspection.
This guide is general information about the law of England and Wales. It is not legal advice. CasePoint does not cover personal injury, or mis-sold mortgages or financial products.
Frequently asked
I only had the lender's valuation. Can I claim at all?
Possibly. If the property was a modest home, you paid a fee for the valuation, and you relied on it in deciding to buy, the valuer may owe you a duty of care even though their client was the lender — that is the principle from Smith v Eric S Bush. But the duty is measured against what a valuation involves, which is a brief inspection to confirm the property is adequate security. It is not a survey.
The valuation had a disclaimer saying I couldn't rely on it. Does that end the claim?
Not automatically. In Smith v Bush the House of Lords held that a disclaimer of this kind, in a valuation of a modest home, failed the reasonableness test under the Unfair Contract Terms Act 1977. Whether a modern disclaimer survives depends on the property, the wording, and whether you had a realistic alternative.