Property Development A Guide To Surveys

Date Published:

04/06/2009

Once you’ve found the property you want, you’ll need to arrange a property survey to check out its condition and value. What does this involve?

By Sarah Jagger

Survey Types

A survey will help you make an informed judgement as to whether you should buy a property. Carry out the survey before exchanging contracts so if there is a problem, you have time to negotiate any suitable price reduction with the seller. Be prepared to budget for more than one survey in case the first sale falls through.

The three types of survey are the valuation report, homebuyer survey and structural survey:

Valuation Report

Typical cost: £250
This is the simplest and cheapest form of valuation of a property, and will be all that a mortgage lender will require. Its purpose is to reassure the lender that the property is sufficient security against the loan they are offering. So if you default on your payments, the lender wants to be able to sell the property at a price that will meet the outstanding debt.

The valuation takes a short time. A surveyor will check the property inside and out, and assess a suitable value based on its general condition and the values of recently sold properties, and the state of the housing market. The report will contain a summary of condition, with comments on any general faults. It will also have brief recommendations to the buyer on further checks to be carried out.

If you are buying a new-built home, the valuation is probably sufficient especially if the builder has signed up to the NHBC Buildmark warranty. But if you are buying an older property, it's adviable you get a survey before you buy.

To view what a valuation includes and does not include visit www.rics.org/propertysurveys.

Homebuyer Survey

Typical cost: £250+
This is more detailed than the valuation report and can often be carried out at the same time. It’s not usually suitable for properties in need of renovation, or if you’re planning major alterations. The survey will check out:

* the general condition of the property.
* any major faults in accessible parts of the building that may affect the value.
* urgent problems that need inspecting by a specialist before you sign a contract.
* results of tests for damp in walls.
* damage to timbers – including woodworm or rot.
* the condition of any damp-proofing, insulation and drainage.
* the estimated cost of rebuilding the property for insurance purposes.
* the value of the property on the open market.*

*Source: RICS

Full Structural Survey

Typical cost: up to £1k depending on property value
This is the most complete and expensive survey. It is suitable for all properties, especially listed buildings, older buildings, properties you plan to renovate or alter in any way. So you should consider this approach – spending a little more now could save you significant sums in the future. The survey will advise on:

* major and minor defects and what they could mean.
* the possible cost of repairs.
* results of damp testing on walls.
* damage to timbers.
* the condition of damp-proofing, insulation and drainage (though drains aren’t tested).
* technical information on the construction of the property and the materials used.
* the location.
* recommendations for any further special inspections.*

*Source: RICS

Other Reports

There are then a number of specialist reports which can be undertaken by experts in their specific field, such as timber treatment and damp-proofing. The reports are generally undertaken free of charge as part of a firm’s quote for the repair work.

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