What sort of survey should I have?
Only 20% of people get a professional property survey before buying a new home. They can be costly, not worth the paper they are written on, and hold you up buying your home. But having a survey can also mean avoiding a lot of expense and stress – if you are smart about it
What is a mortgage valuation?
- A mortgage valuation is not a survey – it is just a cursory look at a property to assess how much it is worth, with a note about any major works that might be necessary and would affect its value.
- If you get a mortgage, the lender will insist on using a company they trust to conduct the mortgage valuation, to ensure the property is sufficient security for the loan.
- You will usually have to pay for this, although lenders will sometimes throw in free valuations as part of a mortgage deal in order to attract new customers. You can often add the cost of the valuation to your mortgage and pay it off over time, but it’s always cheaper to pay upfront if you can afford to do so as the more you borrow the more interest you’ll pay in the long run.
- Valuations can be shockingly expensive given that so little work is involved in doing them, but buyers have no choice but to get them.
- Different lenders can charge very different amounts for mortgage valuations and the price is normally on a sliding scale depending on how much your home is worth – for example on a property worth £200,000 you might pay around £350, while for a home worth £500,000 you might pay £600 or more.
- It may be frustrating to find that one lender is charging several hundred pounds more than another, but don’t lose sight of the overall cost of the mortgage. A deal with a lower interest rate is likely to save you far more over time, even if you do have to pay a bit more for the valuation.
- Mortgage valuations can be extremely cautious, particularly in a difficult property market. This means that lenders may put a deliberately low valuation on a property to reduce their risk. It can cause a headache for homebuyers if the mortgage valuation comes in lower than the price they have agreed to pay.
So, what is a survey?
A survey is intended to be a detailed inspection of a property’s condition. The surveyor will inspect the property and tell you if there are structural problems like walls almost falling down or subsidence. The surveyor will also highlight if there are any major repairs or alterations needed, such as fixing the roof, chimney chute or rewiring the property. The surveyor will also provide expert commentary on the property, from the type of wall to the type of glazing.
Who does the survey?
- Surveys should be carried out by qualified surveyors
- Most qualified surveyors are members of the Royal Institute of Chartered Surveyors (RICS)
- We recommend using a RICS qualified surveyor because they carry professional indemnity insurance
- If you can get a local surveyor they are likely to have a better knowledge of local market values
- Equally, if you are buying an unusual house, like a lighthouse or a castle, get a surveyor with experience in that specific field
Costs vary from company to company, and depend on the size and location of the property.
Do I need to get a survey?
Surveys can be very useful – they can help you avoid expensive surprises (like an unexpected rewiring job), as well as giving you peace of mind by telling you that those hairline cracks don’t mean the house is falling down. For those who have never owned a property before, a survey can be immensely reassuring.
With the information from the survey you might reconsider whether to buy the property or try and renegotiate the price – if you find it needs £15,000 of roof repairs, it is reasonable to ask for £15,000 off the price. Alternatively, you might ask the seller to fix the problems before you buy it.
Bear in mind, however, you might not always find a survey as useful as you perhaps hoped it would be. Sometimes the surveyor comes in, has a cursory look around and, and tells you that you might have damp and that you probably do not have problems with your gas or electricity – but they cannot say either for sure, and recommends that you seek further advice.
That being said, surveys can be particularly useful if:
- you are looking to buy a very old or unusual property
- the property has a thatched roof or is timber framed
- the building is listed
- you have any specific worries about any part of the property
- you feel very unsure about what sort of condition the property is in
What sort of survey should I get?
There are a number of different types of survey. What you will want depends on the condition and age of your house, and how much you decide to spend.
This is the most basic survey you can get, and the cheapest. It doesn’t go into much detail so may leave you wanting more:
- It is designed to complement the mortgage valuation
- It provides ‘traffic light’ indications as to the state of various parts of the property. Green means everything is ok, orange is some cause for concern, and red means serious repairs are vital
- It also provides you with a summary of risks to the building
- It does not include any advice nor a valuation
This is a more detailed survey:
- It will tell you any obvious major problems – obvious rot, subsidence, etc.
- It includes a valuation and an insurance reinstatement value (how much you would receive were the building to burn down)
- But, the surveyor is non-intrusive: they will not look behind furniture, nor lift up floor boards or drill any holes, so any report they draw up is limited
- Furthermore, HomeBuyers Reports are usually so full of caveats and statements designed to cover the surveyors back that they are often pointless
A new level of survey was recently introduced, and is still under development – a HomeBuyer Report without a valuation. This includes all of the above but no market valuation.
Home Condition Survey
Offered by the Residential Property Surveyors Association (RPSA) rather than RICS, Home Condition Surveys are:
- conducted by specialists in residential surveys and produced in a consistent, consumer friendly format
- include practical information such as broadband speed, damp assessment and boundary issues for the conveyancer to consider
- reports are independently checked to ensure consistency and quality
- Home Condition Surveys cost between £400-£900 depending on value of property
Building surveys are expensive, but can be worth the investment:
- They range in price from under £500 to about £2000 depending on the size of the home
- They are extensive surveys and you will be given a detailed report at the end
- Building surveys are valuable if you are looking at a very old, unusual, listed, timber framed, or thatched property
- It is also good to have a full building survey done if you want to do some serious building works
- The surveyor will get into the attic, check behind walls, and look between floors and above ceilings
- It includes advice on repairs, and provides estimated timings and costs, and will tell you what will happen if you do not do the repairs
- Unless specified, it probably will not include an insurance reinstatement value estimate, or a market valuation.
How can I get the most out of my survey?
We often hear complaints that survey reports come with so many caveats that it is difficult to know how to respond to them. Here are a few things that might help you get the most out of your surveyor:
- If you can find a good surveyor who is conscientious you will get much better value for money
- Ask friends and family; ask for references & check references; ask if you can see copies of past reports – will that sort of report be useful for your situation?
- Walk through the house with them – make sure they look at everything, move furniture and peer out of windows
- Ask questions – point out things that worry you and ask about them. It’s your house so you should understand everything
What to do if issues are flagged in your survey
For more advice on what to do if the property you want to buy has problems flagged in the survey, consider becoming a member of the HomeOwners Alliance to speak to our helpful team