When the time comes to purchase your property, after your offer to the seller has been accepted, or alternatively when you are looking to remortgage, it might be worth looking at property surveys. There are lots of types of property survey available, but not all of them will necessarily be right for you.
One of the main types of a property survey, a mortgage valuation will always be taken out by a mortgage lender themselves, as this informs them of the true value of the property, so that they can evaluate their risk.
There are two types of valuation, with one being a physical valuation and one being an AVM (automated valuation model).
Physical valuations involve a surveyor coming out to the property themselves, to see what the property is like. This is especially handy if you’re looking to remortgage and have had any building works done, as they will be able to factor these in to the new value of your property.
Automated Valuations don’t require a physical visit, instead looking at an online database to scan property prices of similar sized and aged houses in that particular area, to come to a conclusion. Whilst these are quicker, they might not always be as accurate as a physical valuation.
Learn more in our article “What is an AVM?“
Your mortgage lender may very well offer this type of valuation for free, though this varies across mortgage lenders. Generally they are the cheapest, as they do not go into a great amount of detail, unlike the other types of property survey, which may offer insight into possible property concerns.
The other main types of property survey, being a Homebuyer Report (Level 2) and a Building Survey (Level 3), will generally not offer a value of the property, though you may be able to pay additional charges to find this out.
Likewise, you may be able to pay your mortgage lender to have one of these taken out alongside their valuation, though you also have the option of going independent, as a mortgage lender typically doesn’t need to see anything more than the basic valuation.
You might find in some cases, that the property has been down valued. This occurs when the mortgage lender’s surveyor deems the property to be worth less than what your agreed purchase price is.
We found this a common occurrence between 2020-2021, where demand saw purchase prices rise higher than mortgage lenders were willing to lend against.
When this happens, your options are either to renegotiate the price with the seller of the property or pay the difference yourself, between the offered price and the value.
You would not have much luck trying to find another mortgage lender or independent surveyor to revalue the property, as they will generally all come to the same outcome.
Taking out a homebuyer report is a good way to determine the safety and quality of the property, with inspections being carried out through every room in the property.
You will be given information on possible concerns that will require further inspection or immediate action, such as damp, mould or ceiling issues.
It will also look to make sure the property is in line with current UK property laws, informing you of any legal issues that need to be addressed prior to purchase.
Because these are more in-depth, you are likely to find that these cost more than a basic mortgage valuation. Furthermore, whilst you can often ask a mortgage lender to include one of these for an additional cost, they won’t necessarily need one of them either.
As such, you do have the option to seek your own independent homebuyer report from an accredited surveyor. A homebuyer report will not usually include a market valuation, though this may also be an additional extra you can purchase when you are arranging for your report to be carried out.
It’s worth noting that a homebuyer report may not be suitable for any listed buildings, older properties, properties that have had extensive works or modification or properties that are in need of modernisation.
The most in-depth of the three, a building survey offers the most comprehensive report of a property. It’s suitable for most types of property and especially comes in handy for older properties, as it outlines any repairs and potential upgrades that need to be made.
Like a homebuyer report, you’ll be made aware of points of concern, legal issues, things that need to be investigated further, possible defects and advice on what steps are necessary to rectify these issues.
It can also give you an outline of the repair timeline, comment on energy efficiency, and outline how the property was built, with notes on how this could affect it in the future.
Furthermore, you’ll get the most detailed visual inspection of wider issues, which can include thorough looks at roof space, ground floors and any services.
This does particularly apply to those who are buying an older house because it will let you know of any minor repairs and damages that are on the property. There is more of a chance with this with an older property.
This will come with a price, however, because of the detailed that goes into the report, however, it will provide you with the most information about the property. As you would expect with this level of survey, this can come with a much larger price tag than the previous two.
That said, it could be worthwhile, especially if you are buying an older property. The argument to be made could be that money spent now, could save money that might have been spent in the future, if any problems were to have gone unnoticed.
Once again, your mortgage lender will not outright offer this, though you may be able to ask them to add this on to your valuation for an additional cost. It also will not come with a market valuation, though this may be able to take place for an additional cost, during your independent building survey.
Whilst the above mentioned are the three main types of property survey, there may be issues that are brought to your attention during a homebuyer report or building survey, that may require further investigation and a specialist property report.
Outlined in these types of reports, will be details on any action that needs to be taken, as well as likely including a guide to the possible costs of having these actions undertaken.
A structural engineer’s full survey will see a specialist come out to inspect the property, reviewing any potential risk or concerns for specific problems, such as trees, drains, asbestos, electrics, timber and damp. This will be an inspection of the entire property and you receive a written assessment for this.
A timber and damp report is where a specialist comes out to test the ground floor walls for any signs present of rising damp. They will also take a look at accessible roof and floor timers, to review any potential signs of a woodworm infestation, as well as rot.
When a CCTV drain report is taken out, a specialist will send a camera down the drains of the property, in order to assess the condition of them.
They will look to see if the drains are blocked and if they are, they will require unblocking. This can typically be done at the same time, but will likely come with additional costs. You can also use this type of report to check any septic tanks or cesspits.
An electrical report is where an electrical specialist will conduct a thorough test of all the electrical circuits within the property. This will be done in an industry standard format that is called a periodic report.
A gas report would see the gas system tested by a specialist, which includes testing all of the pipework, as well as inspecting all the gas appliances in the property such as built-in gas cookers and also the boiler.
Similarly to the gas report, the specialist will visit the property and test all the pipework and gas appliances, including the boiler. A gas and central heating report, however, will also include a visual and functional inspection of the central heating and plumbing systems.
An arboriculturalist report (also known as an arborist report or tree report) will see a specialist inspect the subject trees, assessing whether or not they are a threat to property and drains.
Japanese knotweed reports are designed to inspect the suspect plant for being identified and for assessing the risk. Japanese knotweed can present major problems for a property if not handled quickly and effectively, and getting a mortgage on a property with this can have challenges.
With a wall tie report, specialist equipment will be used to check inside cavity walls, in order to check for the corrosion of any wall ties.
A roof inspection does what it says on the tin and will see a specialist come out to examine the roof both internally and externally, as far as access to this will allow, in order to produce an assessment of the condition of the roof structure, as well as the coverings.
An asbestos report will look into whether asbestos is present in any pipes, roofing, insulation or other areas as well. A specialist will inspect these to see and advise accordingly.
A mundic test will see a specialist looking to see if mundic was used on your property. This was something used in mortar in the past, particularly in the South West. It has been found to weaken over time and may need repair.
If you are looking at taking out a first time buyer mortgage and are purchasing a new build property, you may feel like you can get away with not having a property survey as it is brand new, although it may be beneficial to have one taken out anyway.
A Snagging Survey is a property survey that works specifically for new build properties.
The information that is detailed in this survey will include the overall condition of the property, highlighting both minor and major problems. Examples of these problems can include, but are not limited to, missing door hinges or possible cracks in the ceiling.
These surveys can be great for negotiating on the purchase price, as whilst the house should be finished to a certain standard, these issues can still be present.
Whether you are first time buyer or looking to remortgage, it’s always handy to make sure you have the right property survey for your property. Our team of mortgage advisors are able to recommend external surveyors to you. Get in touch today and we’ll see how we can help.
Last Edited 01/03/2023
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UK Moneyman Limited is Registered in England, No. 6789312
Registered Address: 10 Consort Court, Hull, HU9 1PU.
Authorised and Regulated by the Financial Conduct Authority.
We are entered on the Financial Services Register No. 627742 at www.register.fca.org.uk
