Home buyers are scrimping on surveys to keep down their property purchase costs but could end up with a big repair bill as a result, a firm of insurers has warned.
A poll of 2,000 home owners by Churchill found that 14% of buyers who have purchased a property in the past 20 years didn’t have a survey and relied on the mortgage valuation.
Based on a UK adult population of 50.9m, that equates to more than 7m people.
The survey found buyers are now either not taking a survey or going for the more basic condition or homebuyers report.
In the past 12 months, 9% didn’t have a survey while 17% took a condition report and 13% had a homebuyers report. Just 6% had a building survey.
In contrast, of those who bought in the past three years, Churchill says 10% didn’t have a survey, 18% had a condition report, 20% took a homebuyers report and 14% took a building survey.
Buyers seemed slightly more cautious 20 years ago, with 28% taking a full building survey, although 37% still didn’t have any survey.
A separate poll of surveyors by Churchill found that 36% have seen a trend for people requesting cheaper versions of a survey.
Almost half (48%) of those who relied on a mortgage valuation said work was needed on the property within a year, while this figure rises to 62% for those who just took out a condition report.
More than half (56%) of those who needed major work doing to their property within a year of moving in said the issues were serious enough to have influenced their purchase, should they have had prior knowledge.
Martin Scott, head of Churchill home insurance, said: “It’s encouraging to see the number of people having a survey has increased over time. Only by having a qualified surveyor assess a property are prospective buyers fully informed of the true state of that property, so it is an essential part of the buying process.
“Those relying on a mortgage valuation alone should be wary as this is just a cursory look at a property from a mortgage lender to assess how much it is worth, not a survey looking at the state of the property.”
RICS doesn’t record data on the specific number of each type of survey taken out but says one in five buyers have some sort of survey.
Responding to the survey, Andrew Bulmer, RICS UK residential director, said: “If ever there was a subject needing myth busting, this is it.
“As this data shows, 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.”
To be fair, the last full structural survey I had which was seriously expensive had more caveats than you could shake a stick at. At the end it looked like an advert for other professional services.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Its Often regarded as more accurate to sometimes get just the mortgage valuation and subsequently instruct additional professionals to provide detailed reports.
I.e a gas engineer to comment on the heating, a electrical to comment on the electrics and finally a property care individual to comment on most other matters matters. the list is endless.
At least this way the person who requires the report gets black and white answers with costings rather than a report produced by someone with a sore backside from sitting on the fence,
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Well it seems that the poor old Surveyor, who is simply trying to do the best for their client in sometimes quite difficult circumstances, gets the stick!
Firstly it’s inaccurate to describe the RICS Homebuyer (level 2) Report as more basic. Let’s try to dispel some myths.
The homebuyer report is designed for specific type of properties and is intended to find serious defects. This report also provides a valuation and an insurance valuation. Now a Surveyor is not an electrician, gas safe engineer or drainage contractor, but will make a comment upon the condition of these services within the report. They do not, by default, recommend other inspections but in the event that the Surveyor has good reason to suspect the condition of such services, they may well then do so.
Regarding caveats. Again this is often misquoted. The Surveyor is only able to inspect accessible parts of the building and it is a snap shot in time. So when, for instance, a surveyor says that they could only inspect certain parts, for instance a roof space where stored items are present, then that is not a Caveat, that is the Surveyor telling the client that they could not inspect a particular element as thoroughly as they would have liked to. It is essentially then for the client to ensure the areas are cleared and a further inspection carried out as necessary. Often client’s don’t read the report that way, but it’s how they should read it!
Yes there will always be examples of good and bad practice in such matters, but to use this analogy: Just because you had food poisoning in the past, does that stop you eating food? Of course not, but you might ensure you purchase your food from a reputable supplier, who has experience of preparing it and the requisite qualifications to do so? Also, with the advent of modern review technology, you’d ensure it was provided by reputable supplier.
Hope this helps clarify.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
I was going to dislike your comment for a moment and move on, but I thought I’d comment instead.
We all appreciate what a surveyor can and can’t do in a Homebuyer’s Report, but from the point of view of both the buyer (panicking over 3 red “stop” symbols for gas, electric and timber & damp) and the agent (the house is 50 years old for heck’s sake – of course the electrics aren’t brand new, the boiler is a few years old and the patio is probably a bit high – well, we all knew that in the first place – doh!)
I can understand why somebody in RICS/SAVA/etc thought the traffic light notation would be sensible, but you have to remember that in the UK (as far as driving goes) green means go, but both amber and red mean STOP NOW!
It makes financial sense for a buyer to have a basic report and get the tradesmen in.
From my perspective as an estate agent (who is RICS as well) to try and persuade my buyers to get the basic report.
It causes far less hassle.
And, of course, the one thing I haven’t mentioned yet is those ****** conveyancers who dutifully read through the report and insist on 8 separate indemnity policies for crossovers and through lounges that were done 20 years ago.
They barely get a mention on the basic report (unless there is a problem) but you’ve paid extra for a 20 page report and they have to fill it up with something…
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Of course it is the conveyancers fault – it always is!! I suggest you familiarise yourself with the CML Handbook. It is my indemnity on the line, not yours and if I act for the buyer, I am the only person representing the buyer and I will do what it takes to give as much protection to my client as I can. If that delays a matter, then it will delay a matter. Deal with it. Maybe if Agents did their job correctly in the first place, many of these problems could be overcome at the outset. How difficult is it, when describing the property as recently modernised and extended, to check that the Seller has the right paperwork and can provide these to their lawyer and if no paperwork, then to advise their lawyer now, rather than wait for the survey to pick up on the two storey extension, loft conversion with spiral stair case, new boiler etc. We both want the same final result, picking fights and name calling doesn’t help either the seller or buyer.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
I love you – you beautiful, beautiful person – thank you. I have wanted to rant about this for a while and you have given me the perfect opportunity.
Whilst I am not a licensed conveyancer, I do have 25 years in the business and RICS after my name (hark at me trying to make myself look clever).
What I would remind you of is the Law Society Conveyancing Protocol – a copy here for you https://www.lawsociety.org.uk/accreditation/documents/cqs-protocol/
In the particular case I mention (and well over 100 that I have dealt with in my career) indemnity policies were not at all necessary.
“Why?” I here you ask – because the Protocol says so.
Essentially speaking, in the case of Building Regs (for example), once the 12 year limitation is over then there is no risk to the buyer from the council trying to enforce any action.
But worse still the indemnity policy doesn’t protect the buyer – it protects the lender.
So telling the buyer the must have it is mis-selling…
“Why?” I hear you ask again – because the lender will take the conveyancer’s promise that the title is good.
The indemnity policy takes the solicitor off the hook because they don’t have to make a professional judgement.
Do solicitors earn commission from organising them? If so you’d better watch out – we’ve all seen what happens when commission is paid when products are mis-sold!
Why then should the owner (because it is nearly always the owner) pay for an indemnity policy that is unnecessary?
To cover the buyer’s solicitor because they are not prepared to be a proper professional about it?
YOU HAVE TO BE KIDDING ME?!?!
And have you ever heard of anyone claiming on one of these policies? I haven’t.
Countrywide is one of the largest issuers of these policies and most of them cost less than £150 – just enough to pay a commission, make a bit of profit for the issuer and cover the cost of paperwork for a massive block policy.
A completely unnecessary merry-go-round of back slapping money wasting, time wasting garbage.
You mention that it’s an agent’s responsibility to sort out some of this paperwork in advance.
Most of the cases that have got me most annoyed (3 within the last 12 months) have all revolved around an absence of paperwork – how can I organise paperwork for something that is exactly the same as it was built 117 years ago?
Explain to me that… Go on, I double dare you!
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Thanks for the love. Doubt the wife will be as pleased :). If you actually read my post you will see I mentioned the CML handbook. Completely separate from the protocol.
You might, in your 25 years (31 for me next month including time out of conveyancing when I obtained MNAEA, MAPIP & MARLA qualifications, now I am sounding clever) be aware that in most cases the buyers lawyers act for the Lender too. Yes, if there is a lender then the policy will protect the lender but it is the lender who insists on the policy. See the CML handbook.
Common sense is no longer allowed. In the 1980’s we could make a decision and be professional and lawyers and agents worked together and helped each other resolve these problems. I have known agents in the past help track down previous owners so they could swear a stat dec. No chance these days. Agents just want an exchange so they can get their commission. And this is true, given the number of calls towards the end of the month advising the chain will collapse if there is no exchange. How times have changed.
I do not make the rules, I have to abide by them though. Policies are a waste of time and money. Thats what i tell clients. The owner pays because it is classed as a defect on title. Like you, I have never known a policy pay out. I do not claim commission. Dead set against it. That would be ripping a client off. Agents can help. They can advise sellers on the regs and suggest that solicitors are instructed and the paperwork looked at/into before a sale is agreed. I am surprised no one has thought of that before. It could be called something like Home Information Pack!!!!!! Thats an attempt at humour.
Hope this goes some way to explain. Any typos are because i am typing on my phone whilst my footie team tries to ****** victory from the jaws of defeat, for a change. Not too bad i hope. Whats my reward for this double dare? I hope you are less amourous when you read this, I’m not that type of guy.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Wow – i never thought s n a t c h would get caught by the swear filter. Hope this doesnt get *’d out!!!!!
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
BTW I liked you because I haven’t had that much fun ranting in quite a while.
😉
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
The entire Homebuyer report is a complete waste of paper.
Highlights the urgency of repairs but misleads in what people really want.. The traffic light single process misleads people into thinking urgent repairs are costly and thus non urgent repairs vice versa.
Of course a surveyor cannot comment on the exact cost of a repair but it doe nothing to balance that urgent repairs may not be expensive as non urgent repairs.
They know the report is useless and yet quietly sit in silence and fail to deliver a report that makes more sense to the public.
THE HOMEBUYER REPORT has robbed people of their dream home than any other instrument. Its for lunatics to defend.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
I concur.
But two words are apparently insufficient to qualify as a post – so this padding out is necessary.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Not Really
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Testing testing
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Blimey – they’ve moved the goalposts!
TFFT!
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Sorry but this really is a story for the silly season – oh – this is the silly season!
Buyers have never had surveys on the majority of properties. In our area I estimate that only one buyer in 10 has a structural survey or homebuyers report and almost all rely on the mortgage valuation. There are two points that might be worth noting.
Firstly, whilst there are very few people who say they regret having a survey, I have never met anyone who bought a property without having a survey and regretted that either. There must be some but I’ve never met them.
Secondly, in this area, the surveyors hate the “tick box” homebuyers report and most are only offering full structural surveys. Yes, I know they are really the same inspection but the public don’t want their advisers providing them with what they see as tick-box reports and expect something more detailed and professional.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
“”Almost half (48%) of those who relied on a mortgage valuation said work was needed on the property within a year, while this figure rises to 62% for those who just took out a condition report.
More than half (56%) of those who needed major work doing to their property within a year of moving in said the issues were serious enough to have influenced their purchase, should they have had prior knowledge.””
What a load of chaff the above is, talk about reeling out useless stats to try and put your argument across.
The simple fact is most houses dont need silly money spending on a survey. As agents the last thing we want to hear is that a buyer is instructing a full survey….. Surveyors can continue to get overpaid for their drive bys and ‘valuations’, something us agents have happily assisted them with over the years.
I had a mortgage survey recently on my own house, and the surveyor was talking about a shortage of people in the industry; why not utilisise the skills of the qualified and long experienced valuers more? I can count on 2 hands the times I have been paid to carry out valuations over the years.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
First things first – this ‘survey’ of surveys goes back over twenty years of homebuying!
The actual percentage who bought within the last 12 months and didn’t take up a survey/report/whatever is over 50% less than the 14% overall quoted – so it seems that Churchill have come very late to the party on tis one and more people are now commissioning one.
(…lights blue touchpaper…)
Which, when you read them, makes you wonder why they even bother sometimes.
(…blinding flash… mushroom cloud forming… shockwave approaching…)
Come on, ‘Surveyor’ – bring it on!
I’m ready to rumble!! ;o)
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Can’t imagine that it’s my trusty Plank giving me these ‘Dislikes’ – so let’s assume that I’ve rattled the cages of one or more surveyors.
Come on, chaps and chappesses – use your skills for flannel and DEBATE – don’t take the wimps’ path!
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
The only way to resolve all these issues is the RICS to start developing technology which allows their precious surveyors to suvey a property without going into a roof, scramble under floors, climb ladders etc etc Some are using selfie sticks which I suppose is a start but bring back the old days when you went in with a boiler suit, torch, voice recorder and had a shower when you got back to the office!!
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register