What a Property Survey Really Means

Key Points The surveyor does not act for you, you pay him whatever the outcome and so it would be better for him if you did not buy the property A valuation report will point out any major problems that will affect the value of the property You should expect movement on almost all older properties but it is important to ascertain if this is just movement or active subsidence/bulging A full structural survey will almost always suggest that either the damp, roof, electrics, plumbing or structure itself need further investigation Almost all further investigations will cost because those in the trade know the above point and know they are being used and are unlikely to get any work as a result Surveyors from large companies are generally better at giving you a more stable point of view that those from small companies afraid of being sued Surveyors based and working outside London are more likely to down value a property

Most buyers make one mistake here, they believe because they have paid the surveyor to do something, the surveyor is acting on their behalf and in their interests. Wrong. The surveyor is acting very much in his own interests to protect himself from any legal action you may be able to take after the purchase. It is fair that you have the right to sue a surveyor for damages if they miss out something which actually affects the value of the property, but the end result in recent years has been that many Surveyors go completely over the top in order to make sure no legal action is possible. Remember this:



So ironically it is in the surveyors best interest to try and persuade you not to buy the property. For your part you have to try and separate fact in the report from over-the-top speculation and you can do this by considering two points:

• What is the survey actually saying in terms of cost and hassle
• Why did the survey say what he said.

In other words as any historian will tell you, don't just look at what was said but ask why it was said. You should also be careful to differentiate work that should be expected (e.g. you should expect to repaint the windows every two years) and work that no person offering on the property would expect (e.g. the entire roof needs replaced). This chapter covers:

• Types of survey - what is said and how to quantify it
• Types of surveyor - why different surveyors can say different things about the same property

Types of Survey

There are three types of survey:

• The Valuation
• The Homebuyers
• The Structural

The Valuation Survey

This is crucial as if the surveyor does not agree with you, the agent and the vendor, the bank won't lend. It is also the most valuable type of survey and probably all you need for almost any purchase. Most people are not aware that the valuation survey will also report on anything crucial that should be investigated. If they believe there is a serious problem with for example, damp, they will hold back all or part of the mortgage until it is investigated (see below). It is much easier to read a two page report that is very specific about major issues that will affect value than a fifty page report telling you that the aerial may need refixing and one of the windows in the back bedroom needs to be repainted in the next twelve months.

It will probably come as a shock to find out how the surveyor actually works but it goes something like this. They visit the property and check for any really big problems that will affect value. They then look up and down the street for sold boards and 'phone up those agents to ask them what they have sold. If they are similar properties sold at similar prices they sign it off and you get your mortgage.

In the absence of sold signs he calls any local agents and asks them what they have sold recently in the area and tries to match it up. There is nothing more to it than that. If you want to try it for yourself find a sold sign, call up the agent and say, "Hi, this is Fred Smith from Island Surveyors, I see you have sold something in the High Street, can I ask what it was and how much it sold for?". You'll get the complete run down including the actual price it sold for, not its asking price. Note that Estate Agents, by law, are not allowed to tell you (a buyer) the actual price a property has sold for until it exchanges as this is confidential information. Agents are however, always trying to please surveyors because they don't want properties down valued, so if you pose as a surveyor you will find out everything!

Retentions

If the surveyor believes the property is worth the price you have agreed to pay for it all is fine. If, however, he sees a major problem such as damp around the windows he will hold suggest that the bank holds back a certain amount on the mortgage until it has been satisfactorily investigated.

He will say, "The property is worth £250,000 as long as the windows are sound. Until this has been established no one (including the lender) should pay more than £240,000". The surveyor is not saying that the windows require £10,000 worth of work. He cannot because he is not qualified to cost repairs. So he chooses an arbitrary figure. It is simply a way to make sure something is checked before a loan is secured on the property or you pay out the cash.

The retention can be a small amount or the total price agreed (usually in the case of suspected subsidence or other major structural issues). The best way to deal with them is as described in the remainder of this chapter. Take them in your stride, in most cases the issue is much smaller than the surveyor believes and retentions are removed after investigation of the issue.

The Homebuyers Survey

Probably one of the biggest waste of times in the whole home buying process. It is a valuation survey followed by a lot of speculation. You are likely to find out fascinating things like screws missing from plug sockets, wood that needs replacing in windows, kitchen cabinet doors that need to be fastened. The crucial thing on this survey is the valuation. If, with all the property defects, the surveyor still concludes the property is worth the agreed price then (unless the vendor is very

The Structural Survey

For old houses these are generally seen as a must have by almost anyone who has written on the subject but again you need to take a view. If there is something structurally wrong with the property a valuation survey will pick that up. Its most important feature is probably that it will be useful when you come to sell the property as you can show it to a potential buyer under the guise, "When I bought this house X, Y and Z were wrong. I had them all fixed and here are the guarantees or receipts." (See Chapter Fourteen )

Remember it is not possible to have a structural survey done on a flat as it requires access to all parts of the building and unless the neighbours are all very understanding it is not going to happen.

Requesting structural surveys on flats generally annoys the vendor who knows they can probably sell to someone else a little less awkward or a little less naive.

What is in the Survey

To prove your money is well spent a Surveyor will usually want to pick up on something. The choice below is almost a check list where the surveyor will choose one or two for further investigation:

• Damp
• The Roof
• The Electrics
• The Plumbing
• The Structure

Remember a good surveyor will simply say "there is damp which requires further investigation". A bad surveyor will say "there is probably around £5,000 worth of damp that needs to be repaired". It is a ridiculous statement. Does this surveyor own a damp company? In other words remember this

• The surveyor is not a damp proof specialist and will not carry out the work so should not quote
• The surveyor is not a roofer and will not be carrying out the work so should not quote
• The surveyor is not a qualified electrician and will not be carrying out the work so should not quote
• The surveyor is not a qualified plumber and will not be carrying out the work so should not quote
• The surveyor is not a structural engineer and will not be carrying out the work so should not quote

Ironically the surveyor is simply someone who is trained to see tell tale signs that then require you to get a further specialist in. If you want to be thorough and save time then get a valuation survey and at the same time pay for a roofer, plumber, electrician and damp specialist to inspect the property (for freehold properties pay a structural engineer as well). You will shortcut the long survey report and you will know the absolute worst case scenario as each specialist going in will be hunting for work. Then you can take a proper quantified view

You, or the vendor or both, should expect to pay for the specialists if you do decide to investigate further. This was not always the case but these tradesmen are very aware of how much surveyors are trying to cover themselves. They are also aware that no matter what they find they are unlikely to get the work as any quote they give will usually just be used as a negotiating tool. As soon as the new buyer moves in they either take a view on the work or get other quotes to see if someone else will do it cheaper.

Here is how it works in reality:

• Mr X offers and gets a survey carried out
• Mr X is very worried about damp and so gets damp specialist in
• Damp specialist says £3,000 of work required
• Mr X tries to negotiate price, the vendor says , "The damp has never been a problem to me, when I moved in I took a view on it"
• Mr X eventually successfully gets £1,000 off price and goes through with deal
• Three years later Mr X sells his property
• Mr X gets an offer which he accepts
• Mr Xs buyer has a survey which shows up damp
• Mr Xs buyer gets a damp specialist in who says £3,000 of work is required
• Mr Xs buyer tries to negotiate the price, but Mr X is furious
• Mr X tells his agent, "The damp has never been a problem to me, when I moved in I took a view on it"
• Mr X eventually agrees to take £1,000 off as a token of good will to the buyer

In this scenario the truth is that there is an issue with the property but it is not an issue significant enough that anyone will ever actually do anything about it. For this reason a specialist could visit the same property three of four times over a ten year period and never see a penny of work from it.

Damp

There are two types of damp:

• Rising Damp - damp coming up from the ground
• Penetrating Damp - damp coming through the wall

Types of Damp
Rising damp Damp coming through at ground level. There are modern treatments available to resolve this		Penetrating Damp This may come directly through the wall where the wall is below ground level or it could occur on upper floors from faults such as cracked window sills

Expect rising damp on all period properties (Victorian, Georgian, Edwardian, etc.) where you are buying a property that is or includes the basement, lower ground or ground floors. These buildings were never constructed with damp proof courses, they didn't exist at the time! The question is, how much damp?

The normal sequence of events is that the surveyor says there is damp and, if there is no current guarantee for damp proof work, a damp proof company goes in to quote for how much damp there actually is. Most damp proof companies will try to find any damp because they are looking for work. On the surface this all seems to be fairly sensible but actually it could cause you a whole load of problems.

If there is damp try and ascertain what level there is. Damp proofers measure the level of damp and unofficially anything less than a reading of 20 is not important. Anything over 35 is serious and anything over 50 should be visibly obvious. From a layman's point of view you should consider if the work is actually necessary, which you can do by asking a couple of questions to yourself.

If there has never been a damp proof course, the property has not recently been decorated and there are no visible signs of damp why mess with it?

In other words there is probably a natural balance in the property and if there is no damage being caused it means the damp is simply evaporating into the air. To put a damp proof coursing in could upset this natural balance. Damp proof courses are normally a metre to a metre and a half high. With the damp unable to come through and evaporate it could rise further to the top of the damp proof coursing and result in a very concentrated visible damp issue just above the coursing. This would mean, in the long term, even more work and cost for you.

If there is damp could there be another cause?

If the damp proof company is simply looking for work and the surveyor is trying to cover themselves they may both get a damp reading but is it actually penetrating or rising damp. Classic cases of this are damp identified in bathrooms and kitchen areas. The use of showers, baths, frequent cooking (especially boiling) and washing up all cause damp in the air. This is exacerbated in winter months by a lack of ventilation. If the damp is identified in these areas again consider if you saw any visible signs yourself. If not, leave it.

With these two questions out the way damp can be a thorny issue. Before trying to renegotiate the agreed price on something that the vendor has lived with for years, and has had no issues with, consider the Balance of Power (see Chapter Twelve).

The Roof

A roofer will usually charge between £100 and £200. Their quotes can vary enormously.

Almost any roof will need some work and bear in mind that most structures are generally expected to last about 20 years on a period property. As such, if the roofer comes back and tells you the roof will need to be replaced within five years do not be surprised and do not expect to be able to renegotiate in a busy market.

The most common faults with a roof are:

• Flashings need replaced
• Roof needs reinforced
• Roof needs replaced

Flashings need replaced

The flashings are the coverings between the tiles and the wall. Often made of zinc or lead they have a much shorter life span than the actual tiles on the roof. Replacement is a periodic maintenance issue for older buildings so never be surprised when a roofer says they need done, they nearly always do!

Roof needs reinforced

In the middle of the 1900s concrete was the new material to build absolutely everything from. It wasn't just restricted to massive council blocks but also to roof tiles and it became very fashionable to have concrete tiling. Unfortunately few people stopped to consider that these were much heavier than the original slate and so would need better support from the inside. As such many roofs began to bow inwards, not to the extent that they leaked, but bow nevertheless. Extra timber
Most of the time bowing roofs are visual to the naked eye and concrete tiling is obvious because of its thickness.

The Electrics

Again an electrician will charge for an inspection and in almost all cases the property will fail. This is because legislation on electrical systems in constantly being updated. One of the latest changes, for example, is that all plug sockets must be at least 13 centimetres above floor level.

Such changes, however, relate to two situations

• Properties built after the legislation comes in
• Properties that are being rewired

All inspections however have to report on how the electrical system compares to current legislation. When you get the report read it very carefully. If possible discuss it with the surveyor. It is quite acceptable for example to have no earth wire in the lighting circuits on older properties even though this is a legal requirement for new builds.

Ask the electrician specifically if he discovered anything which was out of keeping with the age of the building. Note that he cannot tell you a building is "safe" if it does not comply to the latest legislation because by law it is not! He can however tell you that almost all period properties of that age would also not comply with modern legislation.

The Plumbing

The advice here pretty much reads the same as it does for The Electrics. The only addition to your consideration is the boiler and one of the best ways to get round this is to ask:

• Is it covered by a maintenance contract for repairs? If so it has been inspected within the last 12 months and is no cause for concern
• Is there a gas safety certificate (usually only if the property has been rented)? If so it has been checked recently and is no cause for concern
• Are you planning to replace it in the next 12 months? If so, who cares?

Structural Issues

This is one of the most common reasons for a sale to fall through for two reasons:

• It sounds terrible and most buyers assume the surveyor is qualified to comment
• It is costly to get a structural engineer in to look at the property

The fact is that most of North London is built on clay and most of South London is built on marsh. This means in the north properties tend to slip around while in the south they tend to sink. It�s a historical problem which dates back thousands of years to a time when people were more interested in living beside a river at a shallow point than somewhere that would be suitable for four or five storey buildings.

Structural issues have fairly simple outcomes and really do not deserve the panic they get. In recent years hot summers and wet winters have caused the clay or marshlands that most older properties have been built on to contract and expand. As such almost all period properties will have cracking in their plaster. The smart vendor will have filled this in and repainted before putting their property on the market. It doesn't mean that you won't need to be getting out the filler yourself next year!

Movement to expect in all older properties which have not been underpinned
The clay beneath the property contracts during a dry summer causing the property to move down. This will cause cracking on the internal plasterwork and external brickwork		The clay expands during a wet winter causing the property to move upwards. This will cause cracking on the internal plasterwork and external brickwork

The question is: Is the property moving up and down or is it falling over? No matter how wonky the floors or how many cracks in the wall, these are not a guide to the structure. Settlement may have occurred one hundred years ago which have caused the floors to slope. And cracking in the plaster, well that just happens.

A surveyor, for reasons already mentioned, will err on the safe side and say there are possible structural problems. A structural engineer will cost anything form £500 to £1000 to answer this question and again who pays depends on the balance of power (Chapter Twelve).

The structural engineer will come to one of two conclusions:

• Its fine!
• Not sure and needs to be monitored

Monitoring needs to happen over several months because there is an expectation that the property will move, the monitoring needs to assess if the property will move back or is continuing to move in one direction.

If it is subsiding it will need to be underpinned. Its messy but not expensive as long as the property is covered by insurance and in almost all cases a London property is covered because subsidence is a common phenomena and therefore mortgage lenders insist on it.

If you really like a property and it is subsiding, buy it! The subsidence will be rectified under insurance and you will have an underpinned property which adds value when selling on.

You should also remember that just because the property is not subsiding this year, it may do so at any time in the future. Ironically many buyers shy away from properties that have been underpinned because they are worried about subsidence! Instead they should see it as an asset.

Underpinning for no good reason, however, is not advisable. If a property has a natural up-down movement that has not affected it over the last few decades caution should be drawn to messing with it. Although it may stabilise your property, if you are in a terrace it will then be out of sink with its neighbours who are still moving. This can cause wall cracking and roof damage.

Subsidence and how it is resolved
After monitoring it is concluded the property is moving constantly in one direction. A common reason for this may be a tree outside the property where the roots are sucking water constantly out of the soil		A concrete foundation is inserted underneath the property or parts of the property to halt the movement. This is known as underpinning

There is one other type of movement. With all that going up and down over the years some properties start to bulge out. This could be caused by something like a heavy roof or a roof incorrectly supported or simply because the up and down movement is not happening to all of the property at the same time. In this case the wall will need to be pinned back in by tying it to a more stable wall in order to hold the property together!

In severe cases however the wall may have to be rebuilt which is a major job. In the case of bulging a structural engineers advice should always be sought.

Bulging in the walls and one solution
One of the walls has started to move out in one particular point even though there is no unusual movement below the property		The unstable wall is tied with a steel rod to a more stable wall in order to stop in moving out any further

Other Issues

Whatever else comes up in the survey bear in mind that on older properties:

• the roof is only expected to last 20 years
• all timber windows should be repainted and repaired every five years
• damp proof courses rarely really last the twenty or thirty years they are guaranteed for.

This means that even when the survey says for example, that the windows will need attention in the next two years this should not be a total surprise to anyone.

Types of Surveyors

There are hundreds of survey companies in London. Most of the time the choice of who to use will be made by the lender you are borrowing the money from. For the lender what you want is not important, it is not your money that will be tied up in the property. But the bank will generally only want to know that what you have chosen is a "safe bet" and so they will only ask for a valuation report. Anything beyond this is up to you.

If you are not happy with the surveyor a bank chooses approach the bank directly, tell them your friend had problems with this firm, and ask them to appoint somebody else.

Big Companies and One Man Bands

As discussed earlier the surveyor is acting for himself. He treads a careful line between agreeing with the sale price and not getting sued because he missed something. As a general rule of thumb a large company will be financially stable, well insured and have many surveyors. The result is that when someone from this type of company carries out a survey they will tend to be level headed and, if there are concerns, have colleagues to discuss the issues with and get second opinions.

By contrast a one man band (or small company) knows that one bad decision by him may lead to court action that will put him out of business. If your surveyor is one of these be prepared for a much more thorough and dramatic report, anything really to try and put you off buying the property.

Also be aware that small companies tend to down value properties to protect themselves (it will also stop you getting the mortgage) and many buyers loose perfectly good properties in a rising market because of this. Further still a small surveying company may not be carrying out many valuations and so in a competitive rising market they may be out of date in their thinking and also down value.

If you are organising your own survey go for a large well established firm, even if they are slightly more expensive. The report should be level headed and if they do miss something that comes to light after a few years they will still be in business and you can pursue them for material loss!

Surveyors from London and Those from Beyond

Everyone has been to visit grandparents, uncles and other relatives or friends who have bought and live outside London. Everyone has heard them say how they could buy a whole house with garage where they live compared to a one bedroom flat in London. And everyone has had them come to visit the flat and see their disbelief at how much you have paid for a few hundred square feet of London property.

Surveyors are no different. Once you hear that a survey is instructed you should ensure that the company is based in London or carries out regular work in London. In a busy period the lender may not be able to find anyone free on London and so instruct outside the area. A bank that seems to have very low fees may also, as a matter of course, instruct a surveyor from outside London because the cost base is lower. Similarly if you are instructing your own survey you may have the same issue. The upshot is all too often that the flat is down valued and the bank refuses to lend. There is nothing wrong with the property or the price, its just the surveyor cannot believe what he sees and it looks like madness compared to the prices in say, Norwich.

Summary

With all the ins and outs of a survey report the crucial question is value. If the survey report talks about roof or plumbing but concludes that the property is worth what you have offered then trying to renegotiate price is at your own risk. Too many people ignore this fact. Most properties are old, very old, and problems or future works are to be expected. The surveyor knows this and that is why they say: "In its current condition and in the current market the property is worth £x".