I am in the process of buying my first home and have been advised to carry out a survey. I have already paid for a mortgage valuation. What is the difference between a survey and mortgage valuation?
It is always recommended for a survey to be carried out on a property before the exchange of contracts. This is because it is the buyer’s responsibility to find out as much as possible about the property, including any physical defects, before committing to the purchase.
There are three types of survey available to a buyer:
- 1. Valuation – This is the simplest form of survey and is carried out by the mortgage lender to assess whether the property being bought is suitable security for the loan being offered.
- 2. Home Buyers Report – This is a compromise between the mortgage valuation and the full structural survey. It is a concise summary on the state of repair and condition of the property, including a valuation. Although this is of much more value to a buyer, this type of survey is still relatively superficial.
- 3. Full Structural Survey – This is a detailed inspection of the property and is particularly useful if you are buying a large or older property. It is also of benefit to you when buying a property that has been substantially structurally altered. The report will provide a detailed commentary on the condition of the building’s structure.
I am in the process of buying a property and have been advised to carry out searches. Do I need to carry out searches? If so, which ones?
Unless you are lucky enough to be able to buy a property without the aid of a Mortgage then you will need to request searches. This is because the Council for Mortgage Lenders, which is the governing body for all mortgage companies, states that solicitors must carry out all appropriate searches. We would strongly advise cash buyers alike to carry out searches.
- 1. Local Authority SearchThis search is essentially non-negotiable (even if you are buying without a Mortgage). The result will reveal whether any roads and paths adjoining the property are publicly maintained, any planning decisions, contaminated land issues, any major road schemes nearby, and any enforcement notices for breach of planning permission. The search is only valid for the property you are buying and it cannot predict the future.
- 2. Drainage Search It is almost always advisable to conduct this search. The search will reveal who is responsible for maintaining the sewers, drains and pipes that serve the property and their location. It will clarify if the property is connected to the mains water supply and confirm how charges are made i.e. meter or rates.
- 3. Environmental SearchThis search is strongly recommended and will give you an indication of the former use of the property and if the house is in an area affected by flooding or subsidence. This information will help you decide if the property is at risk. If any work is required to ‘clean up’ the land this is the responsibility of the landowner and the bill will be your responsibility. This can be avoided if the risk is identified prior to you buying the property.
- 4. Other SearchesDepending on where the property is located and on any specific requirements of your Mortgage Lender, some extra searches may be required e.g. Coal Mining. Williamsons Solicitors will advise you if any additional searches are needed.
What if there is a problem with one of the searches?
Usually, most problems that arise in search results can be dealt with prior to completion or indemnity insurance can be obtained. It is important to remember that although you are buying the property and may be willing to accept the search results, your Mortgage Lender may not, and ultimately they have the final say.
A freehold property is when you own your home outright forever and and have the right to occupy it for an unlimited period of time. A leasehold property is quite different. A leasehold property gives you the right to use a dwelling owned by someone else for a fixed period of time (typically 99, 125 or 999 years). At the end of the lease, the owner of the property can either renew or end the lease and enforce the owner to move out.
If you are obtaining a mortgage to buy a leasehold property, the lenders legal requirements will be much more stringent.
Leasehold conveyancing is much more complicated than freehold conveyancing and therefore the legal fees for dealing with a leasehold property will be slightly higher because of this.