The Royal Institution of Chartered Surveyors (RICS), are warning that homebuyers who try to save money by not having a survey of their new home, could be storing up problems for a later date.
RICS have warned that if a survey is not completed, families who may already be financially stretched could risk huge repair bills putting right problems with their new home, which a survey would have highlighted before the purchase was completed.
The survey of 1,000 buyers, which was conducted by ComRes for RICS, has revealed that 20% of families who chose not to have a survey completed later uncovered major faults.
Experts say the cost of not having a survey can run into thousands; the RICS research showed that many people who bought a property without having a survey carried out, later regretted this decision and were faced with repair bills averaging £5,750.
Building surveys can cost between £400 and £1,000, but even the cheapest survey should pick up on serious problems.
Many buyers rely on their mortgage provider’s valuation report, however this may be a simple ‘drive buy’ valuation, simply aimed at confirming the value of the property, rather than its’ condition. Estate agents insist that ‘drive buy’ valuations do not include a full inspection and therefore are unlikely to uncover major internal problems, which could cost thousands to put right.
Homebuyers are notoriously suspicious of surveys, often nervous that surveyors can hide behind get out clauses and disclaimers, if they fail to detect serious or catastrophic problems.
However, despite the number of people not having a survey, the RICS report found that 73% of people who did pay for a survey, said it provided them with peace of mind and over 50% felt it was value for money.
The government is currently resorting to extreme measures to try and pump life back into the housing market and to help both first time buyers and home movers, including the Funding for Lending Scheme, the NewBuy scheme and the recently announced Help to Buy Scheme.
Many cash strapped borrowers are having to rely on government schemes in order buy a house, the high deposits and arrangement fees required by many lenders are perhaps two of the reasons why homebuyers are less likely you commission a survey, in an effort to save money.
Experts warn that buying a house without a survey could turn out to be one of the biggest mistakes of your life, especially when entering into a contract to buy a house is generally the largest financial commitment most people will ever make. Homebuying experts also point out, that most people who buy a car would carry out a simple HPI check, to make sure it hasn’t previously been written off and that it is worth spending the relatively small amount of money to get a survey completed on a house to save financial worries later.
On the subject, Peter Bolton King, of RICS, had this to say: “Buying a home is one of the biggest decisions most people will ever make and yet many consumers are doing so blind to the facts. Serious faults are difficult to identify and costly to repair. By not being aware of them consumers are risking a potential home buying time bomb. This can cause extreme stress and financial strain on homeowners who are often stuck with a property they no longer want but cannot sell.”
Different types of survey
There are a number of reports and surveys which are available to homebuyers:
Level 1 – Condition Report
This report provides a basic overview of the overall condition of the property, highlighting areas of major concern without going into too much detail. This option is advisable for buyers and sellers who are looking to either purchase or sell a modern home in good condition.
Level 2 – Homebuyer Report
This kind of report is suited to an older or modern property that is in reasonable condition to the untrained eye. This will provide you with a slightly more detailed report on any significant problems, which could make a difference to the value of the property and require remedial work in the future.
Level 3 – Building survey
This service is considered the absolute best that surveyors offer. The aim of this type of survey is to provide an exceptionally detailed report on the property in question. This option is advisable to all ages of properties, however, properties that are older, larger or non traditional would benefit more from this.
It is also advisable for properties that have been altered to a significant degree. This option should also be considered if the owner is considering a major conversion or renovation.
To reassure homebuyers, RICS standard surveyors are closely regulated; they are required to have professional indemnity insurance, to protect the buyer, should something go unnoticed through the survey or report.