Confused by the different types of property surveys? Wondering whether you need one if your lender is doing a valuation? Read on for a clear guide to the various types available.
If you are buying a property, you may be confused by the different types of surveys available. You may be wondering which one is right for the property you hope to buy. Your lender will carry out a property valuation, but this is not the same as a property survey.
So what’s the difference? A property valuation is carried out by the lender and is for their benefit as it is intended to determine the value of the property. This means they can be confident that it is worth what you have agreed to pay before they commit to lending you money.
The cost of the lender’s property valuation can vary enormously from £100 to £1500 depending on the property. If the value of the property turns out to be below the price you have offered, you can always go back to the vendor and offer a lower price, on the basis of the valuation.
As the lender’s valuation is purely about the property’s value, it won’t reveal anything about the condition of the property and won’t identify any repairs or maintenance needed in future. It’s best to think of it as a basic valuation for mortgage purposes purely to satisfy the lender.
As the basic valuation only relates to property value, we recommend having a more detailed survey of the property. You can arrange this yourself. ‘Many lenders’ property valuations are now data-led, without a representative of the lender physically visiting the property,’ says MB Associates’ Sales Manager, Phil Leivesley. ‘Therefore we would always recommend that a buyer gets a more detailed survey to ensure that they aren’t going to stumble into problems they could have identified before the purchase.’
What is a survey?
A survey is a detailed assessment of the property carried out by a surveyor, intended to inform you about any issues, defects and the cost of repairs. It also offers advice on how to remedy problems. This will enable you to decide whether you still wish to proceed with the purchase. It will reveal the approximate cost of any repairs. A property survey is a comprehensive report, but there are several types depending on the relevant accrediting body.
The surveyor you choose should be a member of RICS (Royal Institution of Chartered Surveyors), Sava (Surveyors And Valuers Accreditation) or RPSA (the Residential Property Surveyors Association). All of them offer different surveys.
Level One Survey: RICS Condition Report
This is a basic survey which describes the property’s condition, identifies any risks and lists any urgent defects. This tends to suit new-build properties. It uses traffic light ratings to illustrate the condition of different areas of the property. It’s probably sufficient if you are intending to buy a new or modern property in good condition. It typically costs from £250.
Level Two Survey: RICS HomeBuyer Report
Ideal for traditional properties in reasonable condition, this is the most popular type of survey, and lists any issues that might affect the value. The surveyor will make recommendations on any repairs needed and maintenance. It will flag up any issues such as damp and subsidence. The surveyor will only inspect surface-level issues and won’t move furniture or pull up floorboards to check the property.
The cost is typically from £400. It also comes with an option to have an independent valuation of the property.
Level Three Survey: RICS Building Survey
This is a detailed survey that looks at the property’s overall structure and condition. It is an in-depth inspection and uses a clear presentation style and a rating system to help you identify any serious issues. It’s ideal if you are buying an old property or a building that has an unusual design or appears to be in poor condition.
This type of survey is not normally done on flats. In a Building Survey, you will get a more detailed analysis of the cause of any faults. It typically costs from £500. If you are concerned about any repairs needed you can ask the surveyor to estimate costs and timings in their report.
The Sava Home Condition survey is similar to the RICS HomeBuyer Report. RPSA surveys are as follows: Home Condition Survey suitable for all types of properties, or a Building Survey (often called a full survey or structural survey) which is the highest level of non-invasive survey. It’s suitable for all properties but again best suited to older properties or properties that are less traditional in layout.
You may be wondering what extra value you get for the added cost of a building survey compared to a Home Buyers Survey. ‘You get a lot more background and explanation of the building and what needs to be done to it,’ says Peter Bray, Managing Director of Spencer Bray Surveyors. ‘The Home Buyer Survey is great for telling you clearly and concisely about a property’s condition and actions you’ll need to take. The Building Survey explains why things are that way – that’s why it’s often the best option for buildings where construction is more complex (e.g. older timber-framed homes) or where there are known issues that you want to understand fully. In both a Home Buyer Survey and Building Survey, the surveyor will enter the loft space to check its condition. A Building Survey will offer more background and analysis of the structure and any defects found.’
You can ask the surveyor in advance to perform an open market valuation which means they will also estimate the value of the property.
What if the survey raises problems?
If you have a survey done and it flags up problems, you can ask the surveyor to give you an indication of how much it will cost to repair any issues and obtain estimates from builders. You could then use the estimates to go back to the vendor and renegotiate the price or ask them to have these fixed before you go ahead.