New research by the Royal Institution of Chartered Surveyors (RICS) has revealed many buyers are unknowingly setting themselves up for an average £5,750 in repair bills on their new home by not having the correct survey, thanks to whole range of hidden problems such as structural defects, rot and subsidence.
Why do you need a survey?
More than a fifth of home buyers who did not take out a survey are now saddled with a property they would never have bought if they had been aware of its true condition.
The survey of 1,017 buyers across the UK found that consumers are clearly aware of the need for independent advice. However, nearly a third failed to get it. The new homeowner may then be unable to afford, or have the desire, to fix the faults and may be left with a property they may no longer want to live in but are unable to sell to recoup their losses.
RICS’ survey shows it is the young and first-time buyers who are at particular risk, with a lack of understanding of the home buying process.
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.
My mortgage lender is conducting a valuation report, isn't that all I need?
A 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?
Clearly you won't be able to pick up on everything - that's a job for the experts.
But there are a few things you can watch out for and draw to your surveyor's attention:
- Cracks in walls or ceilings.
- Check internal walls for signs of damp - signs include mould or peeling wallpaper, or if walls feel damp to touch.
- Problems with condensation - check kitchens and bathrooms carefully.
- Check woodwork for holes from woodworm.
- Beware of crumbling internal woodwork. This could be a sign of dry rot.
- Look in the loft/attic - check for cracks of daylight, and whether there is adequate insulation (around 200mm).
- Check the plumbing. Poor water pressure could be a sign of potential plumbing problems.
- Check for springy floors - feel free to bounce up and down.
- Check the brickwork. If the pointing is in a poor state, then damp will get in. Also check for staining in corners or below gutters.
- Check if the house has a damp-proof course. An older property may not so you will have to ask the owner what measures have been taken to prevent rising damp.
- Check the roof. Ensure there are no missing tiles, and that the roof line isn't sagging. Is there any missing guttering? With a flat roof, check for cracks or bubbles.
- Check the chimney to make sure the pointing in the brickwork is in good condition.
- Check for cracks in external walls, which could mean subsidence.
- Check for blocked or damaged drains.
- Check for cover-ups - such as where paint or render has been applied.
- Check for large trees near the property - roots may interfere with the foundations.
- Check doors and window frames for signs of rot.
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 excludes cost 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.
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.
What to do with your survey: can you get money off?
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
Information from www.thisismoney.co.uk
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