RICS property guides

Guide to understanding property surveys

June 2007

RICS (Royal Institution of Chartered Surveyors) has developed this guide to help you understand the difference between a survey and a valuation. You’ll find plenty of practical tips and sound advice on which survey to go for.

Your home is likely to be one of the most expensive purchases you ever make – you need to know as much as you can about the property before you buy it, so having a survey makes good sense – and could save you thousands of pounds in costly repair bills.

Which? and The Council of Mortgage Lenders advise you to get a survey before you buy, and not just to rely on a valuation. Using the services of an RICS surveyor offers real peace of mind because:

• They give you clear, impartial and expert advice

• They act in your interest

• They are tightly regulated and have strict codes of conduct to protect you – including proper insurance

• RICS members have to update their skills and knowledge throughout their careers, so you can rely on their expertise.

• You are further protected by a complaints service.

What you can expect from a survey

Surveys are a kind of ‘health check’ for buildings. If you’re buying a property, you should have a survey done before you enter into a contract – or before making an offer, if you live in Scotland.

A survey can actually save you money. If there are serious structural problems, you can often re-negotiate the sale price of the property to reflect the cost of necessary repairs – or you may even decide you don’t want to buy it at all.

Your surveyor will report on all the parts of the property they can easily reach. They don’t inspect under carpets or furniture, and they don’t test the water supply or wiring – though they’ll comment on their condition.

There are two main types of survey, an RICS Homebuyer Survey and Valuation (HSV) and a Building Survey.

If you’re about to buy a property, you may have specific worries about the building you’re going to buy. Talk them through with an RICS member – they’ll be happy to discuss your particular concerns in more detail and help you decide which type of survey is right for you.

If you’re interested in making structural changes to a property, or you think there may be a damp or dry rot problem, an RICS member will be able to advise you about this too – or detect any faults that may cause problems in the future.

Their report is totally independent and designed to help you make a more informed decision. Costs vary according to which type of survey you have, but both Homebuyer’s Survey and Valuation Reports (HSV) and Building Surveys can offer reassurance and real peace of mind.

Mortgage valuations

A valuation isn’t a survey. It’s a limited check on the property that your mortgage lender carries out to ensure it’s worth the money they’re lending you. They’ll probably ask you to pay for the valuation. Many lenders provide a copy of the mortgage valuation to the buyer but it is unlikely to cover items of detail which would be picked up in a survey.

However, there may be structural problems in the property that would cost a huge amount to put right – and they won’t appear in the valuation report. This is why it’s really important you have a survey. An RICS surveyor is fully qualified to carry out a more detailed survey, before you buy your home.

A mortgage valuation includes:

• Details of property and construction

• A brief statement on condition of property

• Identify possible repairs

• Value of property (with repairs work if required)

• Insurance recommended figure

Homebuyer Survey and Valuation Report

A Homebuyer Survey and Valuation (HSV), also known as a Homebuyer’s Report, is a survey done to a standard format set out by RICS – it’s most suitable for conventional properties built within the last 150 years, which are in reasonable condition.

It doesn’t detail every aspect of the property, and only focuses on urgent matters needing attention. It’s not usually suitable for properties in need of renovation, or if you’re planning major alterations.

An HSV includes details of:

• The general condition of the property

• Any major faults in accessible parts of the building that may affect the value

• Any urgent problems that need inspecting by a specialist before you sign a contract

• Results of tests for damp in the walls

• Damage to timbers – including woodworm or rot

• The condition of any damp-proofing, insulation and drainage (though drains aren’t tested)

• The estimated cost of rebuilding the property after a fire, for building insurance purposes

• The value of the property on the open market.

Building Survey

A Building Survey is a comprehensive inspection of a property. It’s suitable for all properties, especially:

• Listed buildings

• Older properties

• Buildings constructed in an unusual way, however old they are

• Properties you plan to renovate or alter in any way

• Properties that have had extensive alterations.

It examines all accessible parts of the property – and you can ask to have specific areas included, so it covers any particular concerns you have about the building.

A Building Survey includes details of:

• Major and minor defects and what they could mean

• The possible cost of repairs

• Results of damp testing on walls

• Damage to timbers – including woodworm and rot

• 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.

A Building Survey doesn’t include a valuation, but your surveyor can provide this separately if you need one.

Home Information Packs

In June 2007 the government is introducing reforms that will change the way we buy and sell our homes in England and Wales. All homes put on the market will need to have a Home Information Pack (HIP) prepared on behalf of the seller. It is most likely that the seller’s estate agent will arrange for the HIP to be prepared. The HIP will then be provided to buyers so that they have information about the property up front and can make a more informed purchase decision.

Some estate agents may offer Home Information Packs before June 2007 as part of the Government’s dry run to test how they will operate in the market.

At the moment when you buy a property you have to make an offer with very little information to hand. If a building defect or legal problem shows up later it can cause buyers extra expense, ruin a sale or even destroy a chain.

The HIP aims to introduce greater certainty into the home buying and selling process by providing searches and other information at the start of the process when a property is put on the market.

What will the HIP contain?

Documents which are expected to be included in the Home Information Pack include:

• Index

• Sale Statement

• Home contents form

• Home use form

• Evidence of title

• Search report

• Energy Performance Certificate.

There are additional requirements for Commonhold and Leasehold properties.A number of other useful documents can be included within a HIP on a voluntary basis. These include a Home Condition Report.

RICS (Royal Institution of Chartered Surveyors) is the largest organisation for professionals in property, land, construction and related environmental issues worldwide. We promote best practice, regulation and consumer protection to business and the public. With 120 000 members, RICS is the leading source of property related knowledge, providing independent, impartial advice to governments and global organisations.