Your home is likely to be the biggest single purchase you ever make. So, when you are potentially spending hundreds of thousands of pounds, it makes sense to check out exactly what you’re buying before you commit.
A valuation or survey is an essential part of the housebuying process. If you’re using a mortgage to buy then you will have to have a valuation and even if you’re not there are loads of solid reasons why you should pay a qualified professional to give the property the once-over.
Keep reading for everything you need to know about the survey/valuation process and the types of valuation available to you.
What is a house survey/valuation?
A house survey is designed to help you find out about the condition of the property that you are buying.
It is often carried out by a qualified surveyor. As well as providing a comment on the value of the property, the surveyor will also identify any issues with the condition. Surveys highlight any problems that may not be immediately obvious when viewing a property, such as issues with the roof, wet or dry rot, or structural damage.
Why do you need a survey?
With surveys costing several hundred pounds or more, you may wonder whether it’s worth spending this money at a time when you already have other expenses.
If you’re using a mortgage to buy a property, then you will have to have a survey. This is because your mortgage lender will want to be sure that the property is worth the amount you’re paying, and provides them with suitable security for the loan.
Even if you’re not taking out a mortgage, a survey is still highly recommended. It will identify any issues with the property you are buying allowing you to make an informed decision about whether to proceed.
For example, a survey may identify that the property needs repairs costing £5,000. Knowing this, you can either negotiate with the seller to reduce the price, or insist that the repairs are carried out before the purchase goes through.
According to the Royal Institute of Chartered Surveyors (RICS) 17% of new homeowners that didn’t get a survey ended up paying more than £12,000 on average in order to make their homes habitable. With a survey you don’t take that risk.
The types of survey/valuation available
1. Mortgage valuation
If you’re taking out a mortgage to buy a home then your lender will want to be certain that the property is suitable security for the loan.
A mortgage valuation is carried out on the lender’s behalf, not yours – even if you have to pay for it.
It is designed to confirm whether the property is worth the amount you are paying for it and that there are no significant issues that might affect the bank’s security.
It isn’t a proper house survey, and it will rarely tell you anything about the general condition of the property. Sometimes you won’t even get to see a mortgage valuation.
A surveyor will typically take less than an hour at the property and the report will only be a couple of pages long.
2. Homebuyer’s report
When you hire an independent surveyor to undertake a survey on your behalf, you’ll benefit from having a professional work on your behalf. It is their job to uncover any issues with the property that might cost you money now or in the future, and they want to help you. Their job is to make sure that you are fully informed about the condition of the property before you move forward with the purchase.
A Homebuyer’s report is more detailed than a mortgage valuation and highlights issues such as subsidence or damp. You’ll get advice on any repairs that are necessary and any ongoing maintenance, and they will identify anything that doesn’t meet current building regulations.
The surveyor will not look behind furniture or under floorboards and so they will only identify problems that they can see. It should take around 2 – 4 hours to complete.
A Homebuyer’s report is the most popular type of survey, and is the choice for buyers when the property is in a reasonable condition.
He cost of a Homebuyer’s report varies depending on the purchase price, but you can typically expect to pay between £350 and £950.
3. Building survey
If you want a comprehensive report on the structure and condition of the property that you are buying, you should consider instructing a full building survey. As well as listing any defects or problems, it will also provide advice on repairs and maintenance.
This is a thorough check where the surveyor will look in the loft and under floorboards. It could take up to a day to complete.
A building survey is a good idea if:
- There is a noticeable problem with the property you are buying that you have concerns about
- The property is more than 50 years old
- The property is in poor condition
- You are intending to carry out significant work on the property
- You want to ensure you have the most thorough assessment of the property you are buying.
Again, the cost of a building report varies depending on the surveyor and the purchase price of the property. You can expect to pay between £500 and £1,300.