What sort of survey should you go for?

Published:
18 July 2011
Topic:
Guide,News,Money,Mortgages

When you're buying a new home, whether it be a house or a flat, you want to be sure that it is not going to start falling down within a few years of you handing over the money.

Even if you are stretching your finances to afford the property, it is therefore essential to get a proper survey done to highlight any potential problems.

Not all surveys are the same though, and the one you need depends on both the type of property you are buying and whereabouts it is. There is no point paying for a full structural survey if you are buying a new build home, for example, whereas those purchasing near a river would be well advised to get the flood risk thoroughly checked out before signing on the dotted line.

Whichever type of survey you go for, though, the good news is that even if it does throw up some minor issues with the building, you can often use these to reduce the price - assuming you want to go ahead with the purchase.

David Dalby of the Royal Institute of Chartered Surveyors (RICS) said: "In difficult economic times, it pays to be prepared. Nobody wants to be left with a home that needs extensive repairs or that they can't sell on.

"By carrying out a survey, you'll be armed with information that puts you in a stronger position to decide whether to proceed with the purchase, or negotiate a better deal."

My mortgage lender is conducting a valuation report, isn't that all I need?

It is a common misconception that a mortgage lender's valuation report represents a survey.

In fact, it is merely a valuation carried out on the mortgage lender's behalf and is not designed to highlight any potential problems with the property.

Relying on the information provided by this report will therefore leave you at risk.

Commissioning a home survey, however, allows you to make an informed decision before committing to the purchase.

What different types of survey are there and how do I choose between them?

There are four main types of survey: A valuation survey, a  condition report, a homebuyer report and a full structural survey.

Valuation survey

A valuation survey does exactly as its name suggests: it determines whether the property you are wanting to buy is worth the amount you have agreed to pay for it. This is primarily for the mortgage lender so that it knows it the loan will be covered if the property has to be repossessed and sold.

Some valuation surveys are 'desktop valuations' based on sale prices of similar properties. Others are 'drive-by valuations' where the surveyor will look at the property from the outside and in some cases, the surveyor will enter the property and look at it in more detail.
However, a valuation survey will not highlight any structural problems there may be. It is therefore worth paying for a more comprehensive survey.

Condition Report

Condition reports are new and were introduced in 2011. It is the cheapest option and usually costs between £100 and about £250 depending on a number of factors including the property's size.

Designed for newer properties and conventional homes, it provides a clear and concise report on the condition of the property, plus details of urgent faults and advice for legal advisors.

You will not, however, get a property valuation with a survey of this kind.

This may not prove a problem if - like most people - you are funding the purchase with a mortgage, as the lender providing the mortgage should carry out a valuation anyway.

You should only opt for a condition report if you feel confident about the state of the building, though, as some issues could be missed due to the simplicity of the survey.


Homebuyer Report

If that sounds a bit too risky for your liking, the slightly more expensive homebuyer report, which does provide a market valuation and an estimate of the insurance rebuild cost, as well as all the information offered by a condition report, will offer greater peace of mind.

It costs between about £250 and £400 and includes advice on defects that may affect the value of the property due to repairs and ongoing maintenance, making it a good choice if you have some concerns about the state of the property and how much any problems could cost to fix further down the line.

A homebuyer report should be adequate for properties built in the last 100 years.

Structural survey

If you have reason to be particularly worried about the structure of the building or are buying a period property, however, then it is probably best to go for a full structural survey.

It includes information on defects and repair and maintenance options and is also essential if you are buying a larger property, or are planning to carry out major works.

As with the other two types of survey, costs will vary depending on the size of the property and where it is. However, you can expect to pay around £1,000 for a survey of this kind. This may sound steep but it can be well worth paying if it identifies issues which could cost thousands to put right. 

A full structural survey should provide you with all the information you'll need to decide whether or not you want to proceed with the purchase or pull out because it has identified problems you hadn't anticpated.

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