According to new research from e.surv, homebuyers who failed to fully investigate the state of their prospective home faced a total repair bill of almost £3.6 billion in 2014.Only a fifth...
According to new research from e.surv, homebuyers who failed to fully investigate the state of their prospective home faced a total repair bill of almost £3.6 billion in 2014.
Only a fifth of homebuyers currently commission a private survey when moving house, despite the risk of finding hidden horrors. The average repair bill faced by homebuyers who do not commission an independent survey is £5,750.
A total of 773,400 mortgaged buyers moved home last year, but only one in five (154,700) opted to purchase a private survey. This meant that the total repair bill faced by UK homemovers in 2014 was an estimated £3.56 billion as many buyers unknowingly purchased faulty homes.
In July 2015 alone, UK homebuyers faced a total repair bill of over £300 million. Meanwhile, e.surv's calculations reveal that 52,300 buyers didn't commission a private survey when buying a home in July.
The South East faced the most expensive repair bill for 2014, at £820 million, followed by London (£448 million) and the North West (£325 million).
Richard Sexton, director of e.surv chartered surveyors, comments: As the cost of moving house ratchets up, skipping on a survey can seem very tempting. Although commissioning a private report costs as little as £250, many buyers don't want to accept that their dream house may harbour hidden nightmares. But scrimping on this initial outlay can have severe consequences once the keys of the property have been handed over.
Buying a house is one of the biggest and most important financial decisions somebody can make, but buyers simply aren't protecting themselves. Most people wouldn't buy a car without having an up-to-date MOT, yet the number who consider purchasing property without confirming its condition is alarming. These buyers are risking their financial livelihood, and rolling the dice in the hope that their home won't contain any nasty surprises. On average, the repair bill faced by buyers who don't get a survey is close to £6,000, while some may find themselves facing costs far higher than this figure.
As a nation we are becoming more financially astute, and getting a survey needs to become part and parcel of buying. A common misconception still remains that a mortgage valuation is enough to arm a buyer with all the information they need about a property. However, in this scenario the valuer acts on the part of the lender, rather than directly in the interests of a buyer. A mortgage valuation simply assesses value rather than looking at condition and potential problems. In order to get beneath the surface and discover potential pitfalls like damp, rot or subsidence, buyers should consider commissioning a private survey. This is particularly important when purchasing an older or more unusual building.
Scale of the problem
According to the Department for Communities and Local Government (DCLG), a fifth of houses in England specifically (21%) don't meet their decent homes standard equivalent to 4.8 million homes. Looking at owner-occupied houses in particular, 2.9 million homes don't make the standard or 19% of this type of housing type.
Nearly a million English homes are affected by damp problems like rising damp, condensation and mould. Damp problems affect 3 in every 100 owner-occupied homes, but problems like these wouldn't always be flagged by a simple mortgage valuation.
In Scotland, 13.3% of housing stock around 320,000 homes suffer from damp problems including condensation and rising damp. The RICS HomeBuyer Report will uncover unwelcome issues like damp and subsidence, as well as any key structural flaws, while a full RICS Building Survey will go into even further detail.
Prospective purchaser Mr James Lindsay recently instructed e.surv to carry out three HomeBuyer Reports on properties in the Middlesbrough area. Each property was on the market with an asking price of offers around £50,000', and Mr Lindsay wanted to look into the commercial viability of each property, as he was looking for properties that he could refurbish, and sell-on to make a profit.
The HomeBuyer Reports revealed that one of the three properties surveyed needed a considerable amount of costly work to fix significant underlying structural problems, including major flaws to the roof. After factoring the costs of these necessary repairs into his calculations, Mr Lindsay chose not progress with this sale.
The Reports also revealed some maintenance work to the other two properties surveyed. Although they showed that both houses are structurally sound, they unmasked the need for some lighter maintenance work, including repointing and some roof repairs.
Armed with this information, Mr Lindsay was able to negotiate £5,000 and £10,000 off the asking prices of the second and third properties respectively, saving himself £15,000 in unwanted repairs.
Richard Sexton, director of e.surv chartered surveyors, explains: Getting a survey can help you save a significant amount in the long run. If a survey reveals a major flaw in a property, you will be well equipped to negotiate down on price, helping you budget for the renovations. This is about knowing what you are signing up for, and avoiding buying a property masking hidden and potentially dangerous faults that you can't afford to fix.