When buying a property with a mortgage the lender will insist on inspecting the property before issuing you with a mortgage offer.
But many buyers want a more detailed survey of their intended purchase.
What is a survey?
A survey is a physical inspection and health check for a property.
It should reveal any problems with the property you are intending to buy and provide an independent opinion on the agreed purchase price. If the survey highlights problems and you still wish to continue it should allow you to renegotiate the price with the vendor.
Do you need a survey?
Property surveys aren’t compulsory so each buyer can make their own choices.
The cost of a survey can be viewed as an unwanted expense when buying a property is already expensive enough. However, a survey can cover it’s cost many times over if it uncovers a structural issue with the property.
If you buy a property using a mortgage then your lender will always want a condition report and valuation. Anything else more detailed or expansive will be up to you.
There are 3 types of property survey
Lender’s Valuation Report (Level 1)
This is the cheapest and most basic type of property inspection. It is required by all mortgage lenders but it is not a survey.
This Level 1 valuation inspection (Condition Report) will pick up major defects but it’s primary purpose is to establish the current value of the property in relation to its condition and intended usage. The mortgage provider will want to know if the property is valuable enough to secure your loan against. This is a deciding factor in whether your mortgage application is approved.
Though you may pay for the report, you may not get a copy or even see what the surveyor has written. The valuation is based on the surveyor’s knowledge of comparable prices in the locality. It may also give a minimum reinstatement value, which is the amount of money it would take to completely rebuild the property, should it ever be necessary.
Your lender will arrange an inspection with a qualified surveyor who is approved by the lender to undertake this type of work.
Homebuyer’s Report (Level 2)
You can elect to have a Level 2 Homebuyer’s Report and this will be more expensive than the basic Level 1 valuation.
You can choose to use the lender’s Surveyor and ‘upgrade’ his inspection to include the elements of the Homebuyer’s Report or alternatively instruct another surveyor of your choice.
This survey is more detailed than a valuation for lending purposes and will include a report just for the borrowers on the state of the property. The homebuyer report will not list every single aspect of the property, but it can reveal problems which need further investigation. The report will include all major sections of a property that are visible to the surveyor. However, they will not lift up flooring or carpets and will be unable to inspect the wiring.
This the most popular type of house survey, and a sensible choice for properties that are in a reasonable condition.
We would suggest that this survey is not very appropriate for properties of a non-standard design or construction.
The Building Survey (Level 3)
Also known as a full structural survey it is the most extensive (and expensive) type of survey.
If the property you are buying is relatively new and in very good condition a Level 3 full structural survey may be a bit excessive and so a Level 2 Homebuyer’s may be more suitable.
However, if the property is quite old, has had major building work done or is structurally unsound we would always suggest the full building survey.
It is not unusual for the surveyor to spend a few hours inspecting the property depending on its size. They will look at all aspects of the property and will view the loft and check underneath floorboards if possible.
The Remortgage Survey
When you remortgage you move your mortgage to a new lender but stay in the same property. As you live there already the new lender can be a bit more relaxed regarding the condition and value of the property.
It’s possible that they will send a surveyor to visit the property. However, it is also possible that they just use comparable property sales data to confirm an approximate value without needing to see the property.
House survey fees
The cost of your survey will vary depending on the location, size and type of property.
For the Level 1 Valuation Report and Level 2 Homebuyer’s Report your mortgage broker will be able to confirm the costs. Generally the Level 2 is done at the same time as the Level 1. This helps to cut the costs down and also means you will use the lenders nominated surveyor. You are free to choose your own Level 2 surveyor if you prefer but you will need to arrange this yourself.
For the Level 3 Building Survey you will need to approach different surveyors to compare their fees. Make sure you get a few quotes before deciding who to use.
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