More than seven million buyers don’t bother having a building survey of their new home, research has revealed. But this could put homeowners at risk of unexpected building work.
Churchill Home Insurance asked 2,000 adults across the UK whether they had a comprehensive building survey completed on their current home and found that 14% never had one.
Of the seven million this equates to who didn’t have a building survey, 3.5 million buyers did not have any type of independent check and 3.6 million just had the mortgage valuation that their lender requested.
Buyers are scaling back on the level of survey they pick before buying their property, with the number of people having a basic mortgage valuation up from 63% in 1996 to 91% in the past 12 months.
In contrast, the number of homeowners having a full building survey has gone down dramatically, from 28% in 1996 to 6% in the past year.
Breakdown of survey type when homeowners purchased current property
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However, the insurer found that this could be a false economy. It says that 13 million homeowners have needed unexpected building work completed on their property since moving in. More than half (56%) of those who had major building work admitted that knowing that remedial work would be needed would have influenced their decision to buy their home.
Unexpected work needed to property, broken down by survey type
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The insurer also asked 100 surveyors for the three main problems they detected when carrying out a building survey. A third cited damp as the worst problem they found, while 23% said it was problems with the roof and 15% said subsidence was the main problem they found. Surveyors reported that fewer than one in 10 clients asked for a full building survey when they bought a property.
Most surveyors (91%) reported that buyers of older properties were more likely to have a full structural survey, while 51% said that buyers of new-builds were more likely to have a HomeBuyers report.
Correlation between type of property and type of survey
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Martin Scott, head of Churchill home insurance, says: “While home surveys are expensive, they can potentially save buyers thousands of pounds as they can identify uninsurable risks. It is imperative to find out what you are dealing with at as early a stage in the buying process as possible. Home surveys can uncover damage caused by rot or fungus or even more discrete damage by beetles, moths and woodworms. This knowledge can be used to renegotiate the price, ask for repairs to be made or even pull out of the sale. No matter what, it’s always better to be informed.”
Andrew Bulmer, UK residential director of the Royal Institution of Chartered Surveyors (RICS), adds: “If ever there was a subject needing myth-busting, this is it. As this data brings to light, every year hundreds of thousands of home buyers still rely on a lender’s mortgage valuation, assuming that it is some sort of survey. It isn’t. The lender obtains a simple valuation of the property to make sure they can lend safely, and these are sometimes completed without visiting the property using just a desktop valuation.
“The message for home buyers is clear: a home is the most expensive purchase you will ever make and going down a cheaper route will be a false economy if works are required. There are various levels of survey, and it is vitally important to have a qualified surveyor look at your property if you truly want to know what you are buying,” he says.
What type of survey to go for
With a mortgage valuation, the valuer may not even visit or inspect the property, so RICS currently offers three main types of reports that will go much further:
- RICS Condition Report. Shows the condition of the property, offers guidance to legal advisors and highlights any urgent defects.
- RICS HomeBuyer Report. RICS is introducing a choice for this type of report. From autumn, 2016, buyers can arrange for a HomeBuyer Report (survey), which covers everything in the Condition Report, plus advice on defects and ongoing maintenance requirements. Its existing HomeBuyer Report (survey and valuation) covers all of the above, plus market valuation and insurance rebuild costs.
- RICS Building Survey. RICS recommends its full structural survey offering in-depth analysis on the property’s condition for larger or older properties and for buyers planning major works.
How much does a survey cost?
As the cost of each type of survey varies significantly depending on the price of the property and where it is located, you need to shop around. If you input the price of your property and its postcode, you can get an online quote from Surveyorlocal.co.uk/quote.
As a rough guide, I asked for a quote on a £500,000 property in north London and was quoted £649.99 for a HomeBuyer Report and £829.99 for a full building survey. A valuation report was £340. However, the website does not offer the RICS Condition Report.