Understanding Property Valuations and Structural Surveys

Once you have found the property of your dreams and have had your offer accepted, it’s time to think about a structural survey.  Not obtaining a survey might save you money, but could cost you dearly in the future.

What is a Structural Survey?

A structural survey is designed to evaluate a property and give the consumer peace of mind that there are no structural defects.  This type of survey can be very useful in identifying defects that are not noticeable to an untrained eye and can help you to make an informed decision before signing on the dotted line.

There are 3 kinds of structural survey to consider:

Basic Valuation

Homebuyers Survey and Valuation

Full Structural Survey

Each report differs in detail with the basic valuation obviously containing the least amount of detail.  The full structural survey report will be the most in-depth and many people choose to purchase this type of survey for additional peace of mind.  For example, older properties are more likely to have more defects and therefore a more in-depth report will highlight these and allow you to either accept these defects or withdraw your offer and move onto another property.  The ‘Homebuyers Survey and Valuation’ is by far the most popular chosen by consumers and gives a good amount of information.

Basic Valuation

A basic valuation is usually performed by your mortgage lender.  They need peace of mind that they are making a sound investment in your property and that in the event of you defaulting on your mortgage they will make their money back.  This valuation isn’t really a survey as such and the inspection criteria is very limited.

Homebuyer’s Survey

A homebuyer’s survey is the most popular of all three types of survey.  The format of the survey and the criteria within are areas which have been defined by the Royal Institute of Chartered Surveyors.   Designed for properties that were built within the last 150 years, this survey report focuses on urgent or significant problems or causes for concern.  These might include:

The general condition of the property

The value of the property on the housing market

Comments about drainage, insulation, roofing, damp proofing

Results of any tests such as dampness

Any defects which may affect the value of the property

Urgent problems which need attention before you exchange contracts

Full Structural Survey

If you are buying an older house or you have cause to believe there are some structural defects then a full structural survey is a good idea.  Whilst this survey is the most expensive of the three it could save you money in the long run.  Armed with a list of surveyed defects you could approach the seller of the property to negotiate a lower price.  For example, if the survey makes a recommendation for a new roof you could negotiate the price of this work off of the asking price of the property.  The surveyor will have estimated the rough total for any works required and this can out you in a great bargaining position.   On the other hand, many people get the results of a full structural survey and choose to walk away from a property if the works required are too extensive.  A full structural survey can give peace of mind and also save you a lot of heartache.

The Biggest Purchasing Decision of Your Life

For most people, buying a house is the biggest purchasing decision they will ever make.  Buying a home is expensive and for this reason many people choose to scrimp on the survey and rely on the information given in the basic valuation.  This could turn out to be a costly mistake and spending a few hundred pounds before you buy the property could be much more cost effective.   Paying out £1000 for a full structural survey may sound like a lot of money, but imagine moving into a property only to find you need to spend £15K on re-roofing.  Remember, once you have exchanged contracts, the seller is no longer responsible for the works on the property.

There are many companies offering surveys with prices differing wildly.  Obtain some quotes and more information before you go ahead, but try to get the best survey you can afford.  It could save you money in the future.

Click here to compare survey quotes from local surveyors

Buy a house without a survey – are you mad!?

Ian Cowie wrote a fantastic piece for The Telegraph recently entitled ‘A nasty surprise for ‘penny wise’ homebuyers despite falling house prices which made a salient point that home buyers who opt to buy a house without an independant survey often have to pay for unexpected building works after moving in.

This stems from a recent report by the Royal Institute of Chartered Surveyors (RICS), which found 25% of people who bought houses solely based on the mortgage valuation report later needed unexpected building work costing them on average over £1800 after they moved in.

The purpose of a mortgage valuation is for the lender to assess whether the property you’re dying to buy is actually worth what you think it is – and what you’re trying to borrow.  Mainly so that if you can’t pay your mortgage they can take the house and not lose money.

For that reason alone the lenders valutation is for the benefit of the lender, not for you the buyer.  Although it can be a good guide for you concerning the value of the property,  it can be a very basic survey and doesn’t look at the structure and condition of the building in any great detail.

Many lenders now offer buyers the opportunity to pay a little extra and get a more detailed condition report as part of their basic valuation  survey and it is this that you really need to highlight any rising damp, dry rot, dodgy chimneys and wonky walls.

If you’re not getting a mortgage you can arrange a home condition survey yourself by contacting an RICS surveyor to get a house survey quote who will be qualified to assess the structure and condition of the property and provide advice and likely costs of any work that needs doing to the house – before you complete the transaction, let alone move in.  This can be most useful for picking up underlying issues before you buy the house and giving you the opportunity to discuss these with the seller and if necessary adjust the price to reflect the cost of any works that need doing.

You can expect a home survey quote to cost between £350 and £400, and if you instruct a buildings surveyor yourself and not through your lender you have the added advantage that if anything is missed you will have some come-back under the Surveyor’s professional indemnity insurance – effectively insuring yourself against any unforeseen problems.  Although in the vast majority of cases the surveyor will pick up any issues in his detailed building condition report prior to you buying the house.

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