The Importance of a Home Survey and what one is the right one for you

When you’re buying a new house, it’s all too easy to get seduced by the look and feel of the place – and ignore the ‘shabby-chic’ brickwork or gurgling sounds coming from the boiler. But new research by the Royal Institution of Chartered Surveyors (RICS) has revealed the shocking truth: Many buyers are unknowingly setting themselves up for an average £5,750 in repair bills on their new home, thanks to whole range of hidden problems such as structural defects, rot and subsidence. As Peter Bolton King, of RICS, points out: ‘A general lack of understanding about the home buying process is putting many at increased risk because they are not taking out independent, expert advice.

 

‘Agents can and should offer advice to buyers, however, only a surveyor is trained to identify issues with a property.’

 

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Young and first-time buyers are most at risk – and, even though many stretch their finances to breaking point when they decide to climb on the property ladder for the first time, it is certainly worth making sure you keep aside some cash to ensure the biggest purchase you will probably ever make does not also end up being your biggest mistake.Mr Bolton King adds: ‘Buying a home is one of the biggest decisions most people will ever make and yet many consumers are doing so blind to the facts. Serious faults are difficult to identify and costly to repair. ‘By not being aware of them consumers are risking a potential home buying time bomb. This can cause extreme stress and financial strain on homeowners who are often stuck with a property they no longer want but cannot sell.’

When buying a property you need to think objectively; the money spent on a survey could save you thousands by providing ammunition for negotiating a price reduction – or by making you think twice about buying at all.Prospective buyers are often guided by a common misconception that a surveyor works on behalf of both the buyer and a lender – but this is not the case at all.

Graham Ellis, of RICS, explains: ‘One of the most important message to get over is that a buyer is entirely free to choose their own surveyor; a survey is for them, not the lender. ‘It can get confusing, though, as lenders may offer the option of a survey at the point of the mortgage sale as part of a package with the valuation report (in fact many lenders and brokers refer to the valuation as a mortgage survey to add further confusion!) but there is no compulsion to take this up. ‘However, as part of a package it may be attractive to a buyer as it could work out cheaper.’

 

My mortgage lender’s Valuation Report is commonly confused for some form of comprehensive home survey. In fact, it is merely a valuation carried out on the mortgage lender’s behalf. Costs vary but usually start at around £250.

The end result will determine whether the property you are wanting to buy is worth the amount you have agreed to pay for it, so the mortgage lender knows the loan will be covered if the property has to be repossessed and sold. It is done for the lender but you are entitled to see it.

Although it will show up any serious issues that are likely to affect the value of the property, it won’t give you a real picture of its condition. Relying on the information provided by this report will therefore leave you at risk.

A surveyor, on the other hand, acts wholly on your behalf – and therefore offers the crucial service of impartial advice on your prospective property.The survey then allows you to make an informed decision before committing to the purchase.However, if you are buying a new build home, a valuation is probably sufficient because the property should be covered by the NHBC certificate or Buildmark, essentially a 10-year warranty. Make sure you check this first.

If you’re remortgaging then a basic valuation, required by the lender and often free with a remortgage deal, is all you’ll probably really need, as it’s already your home.What sort of Survey should you go for? Not all surveys are the same, and the one you need will largely depend on both the type of property you are buying and its location.

There is often no point paying for a full structural survey if you are buying a new build home, for example, whereas those purchasing near a river would be well advised to get the flood risk thoroughly checked out before signing on the dotted line.

Be prepared to budget for more than one survey in case your first purchase falls through.

 

This survey provides an objective overview of the condition of the property, highlighting areas of major concern, but without extensive detail.

It is useful for buyers purchasing a modern house in good condition – or for sellers and owners. Condition Reports are the cheapest option and usually cost between £100 and £250. You will not, however, get a property valuation with a survey of this kind. This may not prove a problem if – like most people – you are funding the purchase with a mortgage, as the lender providing the mortgage should carry out a valuation anyway.

 

A Homebuyer Report is more detailed and can often be carried out at the same time as a valuation report.
You can arrange this through your mortgage lender or with an independent surveyor. However, if you’re going for a Homebuyer Report that includes a valuation and you’re commissioning this yourself, you’ll need to make sure that the surveyor you use will be accepted by the mortgage lender for the purposes of the valuation. This type of survey is the most popular report for buyers and is most suitable for modern properties, or a standard older building in a reasonable condition. The results will give advice on any defects that may affect the value of the property, along with recommendations for repairs and ongoing maintenance.
It excludescost estimates for repairs and any detailed description of the construction of the building or detailed advice on specific defects. Costs fall between about £250 and £400 and, because it includes advice on defects that may affect the value of the property due to repairs and ongoing maintenance, it is a good choice if you have some concerns about the state of the property and how much any problems could cost to fix further down the line. These could include urgent issues that need inspecting by a specialist before you sign a contract, including results of tests for damp in walls and damage to timbers – including woodworm or rot.It’s not usually suitable for properties in need of renovation, or if you’re planning major alterations.

 

 

This is the flagship service providing a detailed report on a property. It is particularly useful for older, larger or non-traditional properties, those that have been extensively altered, or if the buyer is planning a major conversion or renovation. Clearly this survey will be necessary if the property is dilapidated.

A Building Survey is a comprehensive report providing a full breakdown of the fabric and condition of the property, with diagnosis of defects, and repairs and maintenance advice. An estimate of repair may can also be offered as an optional service to be provided in the report, if it is agreed with the client in advance.As with the other two types of survey, costs will vary depending on the size of the property and where it is. However, you can expect to pay around £1,000 for a survey of this kind. This may sound steep but it can be well worth paying if it identifies issues which could cost thousands to put right. A full structural survey should provide you with all the information you’ll need to decide whether or not you want to proceed with the purchase or pull out because it has identified problems you hadn’t anticipated. However, unlike the Homebuyer Report, a full building survey will typically not include a valuation of the property – the mortgage lender would usually commission the valuation and you’d be free to arrange your own survey. Why a Building Survey could be your best option – Yes, it is more expensive, but it will throw up all of the unknowns – a Homebuyer Report is not comprehensive, and if you are unlucky some problems could slip through the net.

 

Your decision will ultimately come down to your budget and the type of property you’re buying but, as James Cotton, of mortgage broker London and Country, points out: ‘In an ideal scenario, and if budget wasn’t an issue, you’d always go for the most comprehensive survey you can get – if you’re going to spend such a large amount of money on a house, you want to know if there are any problems with it. ‘If you’re buying a particularly old property, a listed property or one of non-standard construction then I’d say it is certainly worth getting a full building survey done – trying to save money at this point could be a false economy.’

 

 

There are then a number of specialist reports which can be undertaken by experts in their specific field, such as timber treatment and damp-proofing. The reports are generally undertaken free of charge as part of a firm’s quote for the repair work, however, if a problem such as damp is identified it may be worth paying an independent specialist to come and take a look.

How can I find a surveyor? The most important thing is to ensure your surveyor has the relevant qualifications for the survey you decide to go for. Don’t be afraid to ask about his or her experience – and whether they have carried out surveys on similar properties to the one you are interested in. This means they will have a better idea of the sorts of problems to look out for.It may also be advisable to go for someone local – again they will be familiar with the area and common property problems.

It’s very important to use a qualified surveyor. You can usually find one through recommendation from your lender, solicitor or estate agent. Remember, if you are combining a mortgage valuation with a survey, then you will have to use one from the lender’s approved panel.

RICS surveyors are closely regulated and are required to have professional indemnity insurance, which helps to protect buyers if the surveyor fails to detect a fault that later becomes apparent. Buyers can search for a residential surveyor on the RICS website. You can also search via the Independent Surveyors Association (ISA), which is a body of chartered surveyors independent of the large corporate estate agencies and in small practices throughout the UK.

Once the report has been carried out, don’t panic if it all seems like bad news. The survey is designed to highlight defects and once you know the faults of the house you should reopening negotiations with the seller – particularly if you find that you have to carry out some unexpected costly work. If the seller isn’t open to discussion on the price, think carefully about whether to go ahead. If the property is already at a bargain price, it may still be worth proceeding. If they won’t negotiate down, ask yourself if you can afford to carry the full cost of the repairs.