Why do I need a property survey?
Before you buy a home, the standard advice is to get a property survey. But do you really need one or is it an unnecessary extra expense?
Why you should get one
Simply put, the survey is designed to help you decide whether to go ahead with the purchase. Typically, a survey will be organised after an offer has been accepted on a property. For most people, purchasing a property is the largest sum of money they will ever spend in their life. It makes sense to get an expert to give it the once-over. It could save you from nasty surprises and unexpected repair bills. A survey can also help you negotiate down the price.
If you have applied for a mortgage, the lender will organise a surveyor to carry out a valuation. Unfortunately, you’ll have to pay for it – even though the bank wants it done to guarantee its investment. While a valuation report may note obvious defects that need to be fixed, it won’t give detailed information about the fabric of the building or costs of repair. It isn’t a survey but a valuation, a brief check to tell the lender whether the property is worth the asking price. Frequently, the lender won’t even pass on the details of a valuation report. To get more information about the property you want to buy, it’s necessary to commission a surveyor to inspect the building.
Different types of survey
There are three main survey types designed by the Royal Institution of Surveyors (RICS) ranging from a basic condition report to a homebuyer’s survey and full building survey.
The condition report is the cheapest, costing about £200. The surveyor will carry out a relatively short, surface-level inspection of the building. The report uses a “traffic light” system to describe the condition of the property, identify any risks and highlight defects that need urgent attention. The home condition report is intended for relatively new properties.
A homebuyer’s report is the next step up and costs between £200 and £400. It covers general condition of the property, major defects, such as subsidence or damp, and any maintenance needed. It is intended for buildings in reasonable condition. It doesn’t look behind the walls or under the floorboards. Some include a property valuation, so you may be able to negotiate the price down if the survey reveals a lower price than the mortgage lender’s valuation.
The third and most comprehensive is a full, building survey. This involves extensive investigation of the property and is the most expensive. It typically costs between £300 and £600. In some cases, it’s worth the extra money, for example if the property is more than 100-years-old or of unusual construction such as thatch or in need of major renovation. Again, it doesn’t look under floorboards or behind walls but should include the surveyor’s opinion on hidden defects and repair options.
A common complaint is property surveys are overly-pessimistic and spook buyers. “A homebuyer’s report can be scary, a bit daunting to read,” said Claire Chambers of Chambers Estate and Letting Agency. “For example, the roof may be absolutely fine, but surveyor still comment it will eventually have to be replaced because of the age of the property and people panic they need a new roof. There is a lot of ‘this may happen in time’ in a homebuyer’s report. So, we break it down and work through the report with the buyer.”
Paul Preen, managing director of Lang, Town and Country agreed. He said surveys often recommend further electrical or gas safety checks. “It is not saying the property has a problem, but people don’t always understand that.” For example, the wiring may not conform to the latest electrical regulations but that doesn’t mean it’s dangerous or needs to be rewired.
“The trouble is a lot of these surveys are written in such a way as to protect the surveyor from being sued. The surveyor will highlight every potential issue and recommend further reports from experts in the field.” This makes some purchasers ask why they are paying hundreds of pounds for a survey if they then have to stump up for further reports, he said.
Another complaint is surveys are limited. Surveyors don’t pull up carpets or loft insulation to see the state of timbers and there is just a visual inspection of electrics, plumbing and drainage.
Sometimes a survey prompts a rethink. Red flags include the presence of invasive, difficult-to-kill Japanese Knotweed which can make it hard to get a mortgage. Gary Marples, an agent at Stevens Estate Agent, said: “I had a first-time buyer pull out because the survey found woodworm even though it’s easily remedied for hundreds rather than thousands of pounds.”
Surveys that highlight hidden problems can help buyers to renegotiate prices.
Mr Marples said a survey for a buyer looking at a listed period cottage flagged up the roof wasn’t properly supported by its trusses and beams. “We reduced the price by £10,000 to cover the cost of what needed to be done because it was a fairly major job.”
But the estate agent said a survey needed to highlight hidden or unknown problems, such as asbestos, damp or structural issues, to warrant a price reduction. Defects that are obvious, like tatty windows, wouldn’t knock down the asking price.
He advises buyers to meet their surveyor after the survey is done for a chat so if they don’t understand something they can ask them to explain what it means and its significance.
In the worst cases, something major is missed. Paul Preen, managing director of Lang Town and Country, had a purchaser whose home buyer’s survey failed to flag up a tenement – a structure projecting at the back - of a house built in 1850 was in a bad state of repair. It had to be rebuilt immediately after she moved in.
Mr Preen said: “She had redress from the surveying company which covered a lot of the cost because they didn’t pick it up. If she had purchased the house without a survey and just relied on the basic valuation it would have been her problem, her lookout.”
The estate agency boss said the more detailed and expensive a survey, the better protection the purchaser will have. “If you’re going to have a survey, go for the full building survey. There’s not a lot of difference cost-wise between the basic, middle-tier and full building survey but you get a lot more cover.”
However, if you’re buying a newly-built property, you could save money on a survey as it it should still be covered by a National House Buildings Council (NHBC) Warranty, said Mr Preen
But Ms Chambers said it’s still worth getting a basic condition survey even for a relatively new home. She said: “I would always get a survey done of some description because it’s a big investment of money and you need to know it’s okay.”