Whenever you buy a property with a mortgage, the lender will insist on a Valuation Survey to check the property is worth lending against. Unfortunately such valuations exist to protect the lender’s interests, not to inform you adequately as the buyer. The fact you generally pay for this survey no doubt explains why 80% of homebuyers rely on the lender’s valuation. But on this occasion you shouldn’t follow the crowd. If you’re smart, you’ll commission your own independent survey. When you do you must choose between a Homebuyer’s Report, and a Building Survey (aka a “full structural” survey). This article will help you understand why it’s worth paying for an independent survey, what you can expect for your money, and how the type of property you’re buying should determine which survey you choose.
Valuation Survey: Necessary but Insufficient
Valuation Surveys are brief and superficial because your lender is less concerned with the quality of the property than the security of their loan. In the current credit climate this loan is generally a much lower sum than your offer price. The surveyor will usually be in and out of you future home inside an hour, or may simply “drive-by”. Such a survey will merely check that the price paid is in line with similar properties in the area given its age, condition and location. It won’t scrutinise your future home for any potentially costly faults. You’ll get a copy of a short and fairly uninformative report. Since you are not the client, you will have no redress over any errors. So you are unlikely to be any better informed or protected than you were before – despite having paid up to £300 for the privilege.
The surveyor will usually spend at least a couple of hours in the property and up to half a day producing a standard format report typically about 20 pages in length. You can expect this to be written in plain English. It will assess whether the property is a reasonable purchase at the offered price so you can make an informed judgement as to whether your purchase is sound and your offer is fair. You can expect a comprehensive account of the property’s overall condition, and a summary of any urgent or significant repairs. If you do wish to re-negotiate you will do so with a much surer grasp of the hidden costs you’d face as the new owner. The valuation should cover both market and insurance value.
Unlike the Homebuyer’s Report this does not automatically include a valuation unless you ask for one. The contents will be much more detailed (up to 40 pages or more), and the language more technical. If you’d appreciate photos to illustrate the analysis, do check this before commission as there is no standard format for this survey. The surveyor will make a thorough check of every visible or accessible part of the building, spending up to a day on site. You can expect to wait up to two weeks for the full report. If you need to get a verbal top-line earlier you should make this clear at the outset.
You can expect a detailed account of major and minor defects, a thorough analysis of the building’s construction and condition, and technical advice on remedies and ongoing maintenance. Both survey and report can be tailored to your particular concerns.
Choosing the Right Survey
A Homebuyer’s Report is well suited to any standard (brick or concrete) property in reasonable condition built after 1930, which has been subject to little in the way of alteration or extension.
A Building Survey is worth investing in for properties built before 1930, when building regulations were more relaxed. Period properties may not have the foundations expected today. Full surveys are also worthwhile for any property of less conventional construction (timber frame or stone), any dilapidated building, and also anywhere which has been extensively renovated or where you plan major alterations. You should regard the extra expense as a worthwhile investment given that such properties are more expensive to fix and harder to value.
Choosing the Right Surveyor
Lenders may offer to upgrade your survey for an additional payment, but you have no guarantee as to the quality of the surveyor. Choose someone independent who knows the area well. If you are buying a period house, make sure that the surveyor has relevant expertise.
An independent property survey is always worth paying for to avoid costly mistakes. Think of it as the best value insurance policy you’ll ever buy.