Structural surveys

Required Reading


Structural surveys

Because the valuation for the building society is carried out at the same time, the price is reasonably low: examples are given in Table 21. These figures are from the Halifax; those from other societies may differ slightly.

The experience of the Halifax is similar to that of the Woolwich in respect of a full survey: a straw-poll of their managers revealed that fewer than 5% of prospective borrowers go for a full survey. They are, however, finding that the combined Report and Valuation scheme is proving popular and around 20% to 30% of borrowers are going for this.

Although only a limited number of building societies, at the time of writing, formally ran this Report and Valuation scheme, others may be willing to arrange one for you if you ask.

There is no definition of a 'full' survey, except that it will be more detailed than a report. If you decide to opt for the full survey, you may be able to save money by having it carried out by the building

Table 21 Cost of the combined 'Report and Valuation'

Purchase price not exceeding: Fee

£1 £1

15,000 85

20,000 90

22,500 98

25,000 105

27,500 110

30,000 115

35,000 120

40,000 125

50,000 140

60,000 155

75,000 175

society's valuer at the same time as he does the valuation. If for any reason you wish to have a separate survey, the Royal Institution of Chartered Surveyors and the Incorporated Society of Valuers and Auctioneers will put you in touch with surveyors in your area.

It is occasionally possible to reduce the cost of the survey. After I had had one on a house I was hoping to buy, a conversation with my surveyor made it clear that the house was a 'no-hoper': it had got wet rot, dry rot, woodworm -you name it. As there was no point in going ahead, I didn't need a typed report and the surveyor agreed to reduce his fees in consideration of that.

Valuations and the mortgage loan

A valuation plays an essential part in the process of getting a mortgage, because the building societies base their percentage of lending on the valuation figure, not the agreed price. What happens if the building society's valuation is less than the price you have agreed to pay?

This is by no means uncommon -assuming you have agreed a reasonably realistic price, the building society valuation is likely to be within a few hundred, maybe a thousand, pounds of the price. Sometimes the valuation is identical to the agreed price: never in my experience has it been above it.

If the valuation is less than the price, and you are a first-time buyer seeking a high percentage mortgage, you may have a problem. If you are seeking a 100% mortgage you obviously have little room for manoeuvre. There is no 'appeal' against a building society valuation. Your only option is to go back to the seller and, in the light of the report, try to negotiate a lower price.

In some cases -where, for example, you were seeking an 80% mortgage -you may find that you will be asked to pay for a mortgage guarantee policy as the amount of money you require could be 80% of the purchase price but 85% of the valuation. What I have done in such a circumstance is to go back to the buyer and suggest he knocks the cost of the mortgage guarantee policy off the price of the house.

It's up to you to decide whether to go ahead, and on what basis, when you receive the valuation. It's impossible to make satisfactory generalisations, but, if you ask among your friends who have already bought property, my guess is that you will find roughly the same answer as I did -that many people agree to pay some hundreds of pounds in excess of the building society's valuation figure.

If you are in doubt, ask your solicitor what he thinks of it. He's not a valuer, but -assuming he does a fair amount of conveyancing work-he will be able to tell you whether it's within the usual margin for property (and building societies) in the area. In a rising market in particular, it's very common to have to pay slightly over the odds in order to secure the property.

Looking for a no fee mortgages

Do it yourself - Points to watch - valuations

Once you have found your property, it will be your decision whether to rely on the building society's valuation or to arrange your own survey. Some societies, including the Halifax, Nationwide, Abbey National and Leeds Permanent, now offer a 'halfway house' combined valuation and report which, while not as detailed as the full survey, is more informative than the straightforward valuation.

This 'Report and Valuation for Home-buyers' covers all those parts of the property that are readily visible or accessible, including the roof space. It won't, however, include an under floor inspection or tests of the different services (electricity, gas, drains, etc.).


According to the Royal Institution of Chartered Surveyors, such a report should, in the main, be sufficient for 'the average house-buyer' . . .... see: Do it yourself - Points to watch - valuations

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