It pays to be prepared with a survey

Esther Shaw,  27 Jul, 2011

Buying a property without a survey could be a costly disaster if you fail to spot problems or faults before you move in.

Cutting out a survey might save homebuyers some money in the short-term but it could be a costly mistake in the long-run with new research showing that unforeseen repairs can run into thousands of pounds.

New findings from the Royal Institution of Chartered Surveyors (RICS), show a quarter of all homebuyers who fail to have a survey are forced to make unplanned building works to their property after purchase.

The figures show that the average bill for these works, such as damp-proofing or repairing a roof is over £1,800 – although the cost can be much higher in some cases.

Lender’s valuation report

There are three main types of survey to choose from, including the lender’s valuation, the homebuyer report, and the building survey.

If you need a mortgage, your lender will insist on a its own valuation, but while many people assume that this is sufficient when buying a home, this is merely to confirm that the property it worth more or less what you are paying for it. This is based on the property’s location and size, and is not designed to highlight any problems. The valuation can cost up to £400.

It’s wise to pay more for some form of professional survey to make sure there are no hidden problems that could cost a large amount to put right after you move in.

If any issues are identified, you can ask the seller to put them right or negotiate a discount on the sale price.

Homebuyer report and building survey

Both the homebuyer’s report and building survey are more detailed, and designed to uncover any structural problems or urgent defects – enabling you to make an informed decision before purchase.

Generally speaking, the homebuyer report is enough for standard properties under 100 years old. It includes a market valuation and rebuild costs, as well as advice on defects; the report runs to around 25 pages, and costs around £250-£500.

Buyers purchasing a large, old or unusual property should consider paying for a building survey, the most comprehensive report, as this includes defects, repair and maintenance options.

You will be told if repairs are needed such as rewiring or roof work, along with the costs involved, as well as the results of tests for damp and damage to walls and timbers; this costs from £400 to around £1,000.

Home condition report

The good news is, for those who would otherwise rely purely on a lender’s mortgage valuation, RICS has introduced a new simple type of home survey – the home condition report.

Designed for newer properties and produced by a home inspector or RICS surveyor, this report provides a clear report on the physical condition of the property, plus details of urgent faults.

Crucially, this low-cost report does not provide an additional valuation, but sits alongside a mortgage valuation.

How a survey could save £8,000

Julie Robson and her husband were very glad they opted to get a building survey carried out on the new four-bed semi-detached cottage they are buying in Warrington, Cheshire, as this uncovered around £8,000 of defects.

The couple have moved house a few times before, and say they usually rely on the homebuyer report to highlight any problems, but as this property is more than 150 years old, their solicitor recommended they pay for a more detailed survey.

“When we looked around the property, we could see certain problems straight away, such as the fact the boiler needed to replaced,” says 47-year-old Julie. 47.

“We decided to pay for the building survey which cost us an extra £550 on top of the £330 we were already paying for the homebuyer report and we’re very glad we did. It uncovered damp problems and faults on the roof. It’s far better to be safe than sorry, and we are now in the process of renegotiating the price based on the results.”

Surveys are a “prudent investment”

Crucially, a private survey covers aspects that are of the utmost importance when buying a house – aspects that are not covered by the lender’s valuation.

Richard Sexton from e.surv chartered surveyors says: “Typical problems that may be identified include dampness, rotten timbers and roof defects. Without a proper survey, these problems can go unnoticed for a long period of time, meaning you can end up liable for a much greater expenditure further down the line.

“While, on average, a survey identifies work that requires £1,800 to repair, we have seen some horror stories where it’s been much worse. Look at it this way, and a private survey begins to look like a prudent investment.”

David Dalby from RICS agrees that in difficult economic times, it pays to be prepared.

“Nobody wants to be left with a home that needs extensive repairs or one they can’t sell on,” he says. “By having a survey you’ll be armed with information on the condition of the property which puts you in a stronger position to decide whether to proceed with the purchase, or negotiate a better deal.”

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Esther Shaw Esther Shaw is a regular contributor to Confused.com and is the former deputy money editor at The Independent and Independent on Sunday. Before that, she worked as a money and City reporter on The Daily Express and Sunday Express.

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