Property Valuation and Surveys Flashcards
6 cards from real CEMAP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Property Valuation and Surveys flashcards as text
Why might a lender 'down-value' a property during the mortgage process?
Answer: Because the surveyor believes the agreed purchase price exceeds the property's true market value
A down-valuation occurs when the surveyor's assessed value is lower than the agreed purchase price, reducing the maximum loan available.
What is 'leasehold' property and how does it affect mortgage lending?
Answer: A property where the buyer owns the building but not the land, subject to a lease, which some lenders restrict based on remaining term
Leasehold means the buyer owns the property for the lease term but not the land; lenders typically require a minimum remaining lease term (often 70+ years).
Which of the following is an example of 'structural movement' that could affect a property's mortgageability?
Answer: Subsidence causing progressive downward movement of foundations
Subsidence involves the downward movement of a property's foundations and is a serious structural defect that can make a property unmortgageable.
What is the role of the surveyor's 'reinstatement cost' figure in a mortgage valuation report?
Answer: It provides the estimated cost to rebuild the property for buildings insurance purposes
The reinstatement cost is the estimated cost to fully rebuild the property, used as the minimum sum insured for buildings insurance.
What does 'flying freehold' mean in property ownership?
Answer: A section of one property that overhangs or extends over another owner's freehold land
A flying freehold is a portion of one owner's property that physically extends over or under another owner's land, which can complicate mortgage lending.
What is the main distinction between a 'freehold' and 'leasehold' property purchase for a buyer?
Answer: Freehold buyers own both the building and the land outright; leasehold buyers own the property for a fixed lease period and pay ground rent
Freehold ownership means outright ownership of the building and land, while leasehold ownership is for a defined lease term with obligations to the freeholder.