When you’ve found the perfect property for your budget and needs, it’s time to check it out in detail.
Home surveys can be conducted before or after providing an offer on a house, but are most often done after the initial offer has been accepted.
But why do you need to conduct surveys – and which ones should you have done?
Why surveys are important
Surveys help to determine if the property is a valuable investment. A basic survey will provide an estimated valuation on the property, helping you to determine if you’re paying the right price based on your initial offer.
More detailed surveys can help you to renegotiate your initial offer, as they may reveal additional and potentially very expensive renovations and repairs that the property needs.
A survey also provides some reassurance to you as a buyer that there are no major problems that have been missed during the purchase process.
The difference between surveys and searches
During the purchase process, your mortgage provider and your lender will ask you to agree to several different surveys and searches.
Searches look at the property title deeds, boundary information, land covenants, and other things in the surrounding area that may affect the property. For example, a mining report checks for any nearby mine shafts or the likelihood of property subsidence caused by mining.
A survey is a physical check of the property itself. A surveyor visits the property and conducts a range of checks to write up a report for you. This report will help you to decide if you want to proceed with the purchase.
The details in the report will also help your mortgage lender decide whether they’ll confirm or reject your mortgage offer. If big problems arise during the survey, your mortgage may be refused or the valuation reduced based on new information.
Valuation and condition surveys
At the very minimum, your mortgage provider will request a valuation and a condition report.
The valuation will be conducted by the mortgage company using an expert they trust. You’ll have to pay for this inspection, which will cost upwards of £300.
The valuation is essential for any mortgage. It helps the provider to determine if you’re paying a reasonable market price for the property and that it’s a suitable property to secure the finance against.
The condition report is a very basic home survey. It offers a traffic light system of green, amber and red indicators for various areas of the property. Amber means some work may be required, while red means significant and serious repairs will be needed to bring the property up to a safe standard. Green, of course, means everything is okay.
A condition report is very basic and doesn’t provide any advice or specific details about repairs that may be required on the property.
HomeBuyer Reports
The most common type of survey that most mortgage providers request as a pre-requisite to securing the loan is a HomeBuyer Report.
This survey is a little more detailed than a condition report. The report costs from £350 upwards depending on the size of the property.
Your surveyor will look into all areas of the property but won’t move any existing furniture, carpets or inspect areas without clear access such as a loft without a reasonably sized hatch.
Major problems such as damp and subsidence will be noted in this report, helping you to identify any significant repairs that will be required.
You can pay a little extra for a HomeBuyer Report that includes an independent valuation of the property. It also includes an insurance reinstatement value, which determines how much your insurance provider would likely pay out if your house burned down.
For a further cost, you can also buy a Home Condition Survey which covers all of the above as well as potential boundary issues and useful information such as broadband speed.
The difference between a HomeBuyer Report and Building Survey
The top level of surveys, a Buildings Survey, is the most expensive but also the most detailed.
Your surveyor investigates every nook and cranny for serious and minor problems. Not every lender requires such a detailed report, but if you’re buying an old property or one with unusual construction techniques, it’s highly recommended.
It’s like an indemnity: if your surveyor doesn’t highlight a major and clear problem, such as significant damp, that becomes clear once you own the property, the surveyor may be liable for some costs of your repairs.
Professional snagging surveys for new builds
If you’re buying a new build property, ask for a professional snagging survey.
This is where a surveyor checks the property for typical problems found in new build properties. Instead of looking for issues such as damp, they’ll focus on defects to fixtures and fittings, poor workmanship or potentially serious problems involving the structure or fixtures of the property.
This survey will set you back around £350 depending on the size of the property, but it is worth considering as it will help to ensure your property developer fixes any issues before you move in.
How to satisfy your mortgage provider with surveys
Every mortgage lender has different requirements when it comes to survey requirements. They’ll need at least basic surveys to be completed before agreeing to release the funds for your loan.
If something comes up on your survey that changes the situation of the property, such as serious subsidence, your mortgage may be refused.
We recommend speaking to a mortgage adviser if you want to make sure you’re getting the right surveys to help your mortgage application. Contact one of our mortgage advisers in Newcastle on 01914 018229 or send us an e-mail to book an appointment for mortgage advice.
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