When you’re in the throes of purchasing a new house and have what you think is the home of your dreams, it is important not to get carried away – a home is the most important purchase you may ever make and so it’s worth ensuring that what you see is as good as what you’re getting.
Research conducted by the Royal Institution of Chartered Surveyors (RICS) found that many buyers end up facing huge repair bills once they have bought a house, just because they don’t fully understand the home buying process.
New homeowners can be faced with a range of different problems when they buy a new property, including subsidence, wood rot and structural defects, especially if the building is quite old. The only person who is fully trained to deal with the issues a property might have is a chartered surveyor.
The money spent on a survey could save you thousands of pounds down the line and it could also provide you with ammunition to try and negotiate a reduction on the property’s purchase price. But how do you decide which survey to go with?
Chartered surveys are a must in a lot of cases, depending on the age of the property and they will ensure that even though you have to lay out money now, you’ll save in the long run. However, as there are a few different types of survey, we thought we’d help give you an idea of the difference between each and help you get on track with choosing the right one to suit your needs.
What is the process?
Getting a valuation is pretty straightforward. You can use an online valuation reporting tool and the valuation completed by Hunters. A lender will complete a mortgage valuation this can be where the property is not inspected and the valuation concluded using an automated valuation model (a desk top paper based comparison of recent transactions of similar properties, which includes mathematical and statistical modelling to achieve the calculation) or; a physical inspection by a chartered surveyor. If it is a physical inspection the chartered surveyor would inspect the property and check that the value is accurate based on its condition, recently sold comparable properties and the wider economic factors affecting the market.
If you are purchasing a newer property, then a lender mortgage valuation may be enough, but if you’re buying something a little older, understanding the faults in more detail via a comprehensive survey would be advisable.
As with any type of investment there are risks involved and it is up to you to ensure that you manage your risks so that you are informed enough to feel comfortable with your decision to purchase the property.
Types of Survey
Level 2 Report (most commonly commissioned)
This survey is more detailed than the Level 1 condition report and can be completed at the same time as the lender valuation report. You can either have this type of report done independently or you can arrange it through your mortgage lender.
The level 2 report is the most popular survey for buyers interested in a property, as it is suitable for both older homes and new builds, and will give you a detailed report on any defects that may affect the value of the property.
The survey costs between £250 - £400 and includes advice on repairs and on-going maintenance that the property may require. If the house you are interested in needs renovating or will have major alterations made to it, then this is not the best survey to choose.
Level 3 Report
A level 3 survey is particularly useful for large, old or non-traditional properties and for those needing a lot of work or renovation. This comprehensive report will provide interested buyers with a very detailed breakdown of the property’s condition, and will diagnose and provide recommendations on all defects and repairs needed.
The cost of a building survey will depend on how big the property is, but you can usually expect to spend around £1000. A building survey doesn’t usually provide a property valuation, but it will give you all the details you need about the structure of the building to make a decision about whether you want to go ahead and make a purchase or not.
Level 1 Condition Report
This survey will help to give you a complete overview of the property’s condition and will highlight any areas of major concern without going into too much detail. This is a great choice if you are buying a relatively new build that is in a pretty good condition.
A condition report is the cheapest option when it comes to surveys and shouldn’t set you back by more than £100 - £250. You won’t get a property valuation included in the condition report, but if you are buying the house using a mortgage this shouldn’t be a problem, as lenders usually carry out a valuation anyway.
These are the most common forms of surveys and reports used for homes in the UK at this moment in time, so make sure you do your research before deciding what’s best for you and your new home.