What home buyer survey should I have?

Written on 31 August 2016 by Alistair Boscawen in Property News

The range of goods and services available to buy in Belgravia, Knightsbridge and Mayfair puts London at the top of the shops list when compared with the likes of New York or Paris.

Latest data on UK House Prices (HPI) reveals prime central London valuesFrom organic meat and farm-fresh veg at Pimlico Road Farmers’ Market or antique jewellery at Richard Ogden’s Burlington Arcade store to one-to-one personal training sessions at a Mayfair gym, every product or service purchased in the UK is covered by the Consumer Rights Act 2015.

This powerful piece of legislation allows purchasers to claim for a refund, repair or replacement if what is paid for fails to meet the following three standards…

• Satisfactory quality
• Fit for purpose
• As described

If a service isn’t provided ‘with reasonable care and skill’ or ‘as agreed’, the provider must bring it into line with what was agreed with the customer. If this isn’t practical, such as when a haircut’s too short, they must give some money back.

For goods and services bought online, your rights are the same as if you’d bought the product or service from a shop or other seller, except that your right to make a claim starts when you receive the item.

Why do I need a survey?

Despite houses in Eaton Square selling for up to £30m over the past 12 months, the Consumer Rights Act does not apply to house or flat purchases.

Why? Legislation mostly gives protection for consumers buying goods and services from traders. Homes are not legally classed as goods and most properties are purchased directly from a private owner, who is not classed as a trader.

I already have a Mortgage Valuation Report…

The purchasers of homes at the upper end of the Belgravia price range typically finance the deal by taking out a loan against a percentage of the value of their other assets from a private bank.

However, some flat buyers who use a mortgage to help fund a property purchase in Belgravia for under £2m believe their lender’s standard valuation provides all the protection they need.

In the majority of cases, they are mistaken.

Mortgage valuations typically take 15-30 minutes to complete and are designed to give enough information for the lender to decide whether the property is safe to advance money on, and up to what amount.

The valuation, which is based on the surveyor’s knowledge of comparable prices in the area, may also give a minimum reinstatement value. In other words, the amount of money it would take to rebuild the property from scratch.

As a type of property survey, however, it is very limited in scope and only likely to uncover obvious, visible defects spotted during a brief inspection.
Unless you are purchasing a new-build home that comes with a 10-year warranty, property purchasers are better off commissioning a Condition Report, HomeBuyer Report or Building Survey.

3 types of property survey

1. Condition Report

Designed to complement the mortgage valuation, a Condition Report provides traffic light-style indications as to the state of various parts of the property. Green means everything is OK, orange is some cause for concern and red means serious repairs are vital.
This type of survey also provides buyers with a summary of risks to the building, but does not include any advice or a valuation.

2. HomeBuyer Report

Previously been known as a Homebuyers Survey and Valuation (HSV), HomeBuyer Reports were introduced by the Royal Institution of Chartered Surveyors (RICS) in 2009.

Typically cheaper than a Building Survey, a HomeBuyer Report is best suited for conventional homes that were built no more than 150 years ago and appear to be in reasonable condition.
The RICS-qualified surveyor will not carry out an in-depth analysis of the property, but a HomeBuyer Report will include details of

• The valuation of the house or apartment on the open market
• Information about location
• The estimated cost of rebuilding the property for insurance purposes
• An assessment of any drainage or damp-proofing in the building
• The condition of the building’s timbers and whether rot or woodworm is present
• Damp test results
• Information about urgent problems that should receive attention from a specialist
• Details of faults in easy-to-access parts of the property that could affect its value

The advantage of a HomeBuyer Report is it will bring to the attention of the property buyer any aspect of the house or apartment that may currently be causing a problem or is likely to require repair in the future.

3. Building Survey

A Building Survey is the most comprehensive survey available for residential homes and will provide a detailed evaluation of a property’s condition.

Also known as a Structural Survey, a Building Survey is carried out by a chartered surveyor regulated by the RICS who will produce a report that describes the condition of each element of the property. The surveyor will actively search for any structural problems or defects.

This means a Building Survey is best suited for purchasers of older homes that have either undergone renovation or are in need of major work.

Unlike a HomeBuyer Report, Building Survey reports do not have a standard format, which means the surveyor can tailor the investigation to suit a property purchaser’s needs. However, the report will not include a valuation of the property or estimate the cost of rebuilding the home.

A Building Survey report will typically include details of…

• All defects in a property and its general structural integrity
• The results of tests for damp in the walls
• Woodworm, dry rot and other damage to timbers
• The condition of existing insulation and damp-proofing
• Information on the materials used to build the property and some additional technical information
• Recommendations for further investigations on the property

Due to a Building Survey involving an in-depth investigation of a property’s condition, it can take up to a day to complete and the final report can take up to two weeks to receive.

However, by digging much deeper into the current state of the property and its past history, a Building Survey can also uncover any structural problems with the property that would otherwise go unnoticed.

quotation-mark_318-48610Purchasing a property in Belgravia, Chelsea, Knightsbridge, Mayfair, Pimlico, South Kensington or Westminster delivers a range of lifestyle benefits. For expert help finding your perfect property in prime central London, contact Best Gapp today.

Alistair Boscawen

Alistair has 32 years’ experience as an estate agent, starting in the country house department of one of London’s main international agencies before moving to the Knightsbridge house department of the same agency and learning the difference in values between freehold, long lease and short lease houses in Knightsbridge, Belgravia, Chelsea and Mayfair.

All articles by Alistair Boscawen


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