Surveys And HIPs
May 12, 2006
Having put in an offer, and had it accepted, you'll now find that there is yet another cost that goes with buying your own home, and that's called a Homebuyer's Report.
This is where you pay for your own valuation and survey of the property so that you can find out if it's likely to fall down around your ears anytime soon. It'll point out possible problems with things like subsidence, woodworm and rot - and will also tell you useful titbits such as the bathroom window won't open properly or the property has no gas (D'oh!), or that there are three double plug sockets in Bedroom 2.
The question you need to ask yourself is whether you really need a Homebuyer's Report -- particularly as it will cost you in the region of £300-£400. It's a difficult judgement call to make but a good rule to follow is the older the house, the more likely you are to need a Homebuyer's Report. To be honest, if you're spending tens of thousands of pounds on buying a house, then what's a few hundred quid for the extra peace of mind anyway?
When You Might Not Need A Survey
Nevertheless, here's why you may not want to bother with one. First, the house is new. Or it's less than 10 years old. This is because it may be covered by an NHBC certificate. However, an NHBC certificate often only covers serious structural defects for the first two or three years of a building's life. After that you might have an argument on your hands about what else it does cover.
Second, when you find the house you want to buy -- and you tell your prospective mortgage lender that this is the property on which their money will be secured -- the first thing they'll do is send round a surveyor. Your lender will want to know that the house is actually worth at least as much as you want to borrow and that it has no major defects. This is so they can comfortably sell it over your head and get their money back, should you default on the mortgage.
Although you pay for the cost of this preliminary survey, you won't be allowed to see what it says. In fact, most lenders now have a non-disclosure clause, so you can't sue them if their surveyor has messed up. (It puts the onus on you to get your own Homebuyer's Report done.) However, the thing to realise is that, even though you won't be automatically allowed to see what their surveyor says, if your lender approves your mortgage, it is probable that they think the house is basically sound.
Third, if there is anything substantially wrong with a vital part of the house, your lender is likely to make it a condition of the mortgage that you fix the relevant defect within, say, six months of moving in. Strangely enough, this alerts you to any particular problems!
Fourth, it's not that hard to mug up on the classic signs of subsidence, rot, woodworm and damp. Read up on it -- there are plenty of books around telling you what to look for. You can even buy a damp-testing meter from B&Q for £15! Best thing of all is to take a trusted builder round the house and see what he says.
If you spot anything suspicious, then get a Homebuyer's Report so you know just how big a problem you're going to have to deal with.
However, one very good reason for paying for your own survey is that you may be able to use it to get the price of the house reduced. If you can show that you're probably going to have to spend £2,000 on a damp-proof course, the seller may be prepared to cut the asking price by a similar amount. It's worth a try, so don't be afraid to ask.
If you're really pushed for money, the Homebuyer's Report is one single expense that you may be able to skip. You shouldn't. You could -- but only if you're confident that you can fully research any potential problems yourself.
Home Information Packs
To finish this piece, a quick word on Home Information Packs (HIPs). You've probably heard about these in the press. They're due to be introduced in June 2007 and will contain much of the information typically found in a Homebuyer's Report. However, the Government has recently announced that HIPs will no longer have to contain a Home Condition Report. For more details, see this article.