Buying without survey a false economy
W ITH the buy-to-let market booming, amateur landlords are being warned that skipping a full structural survey of a property before purchasing could be a false economy and leave them facing a bill that will wipe out any profits they hope to make.
The Royal Institution of Chartered Surveyors says that a typical buy-to-let property will need work doing on it and investors need to know exactly the scale – and cost – of that work before deciding on a property.
The RICS warns that a common misconception is that a mortgage lender's valuation report is a survey. In fact, it is merely a valuation carried out on the mortgage lender's behalf and is not designed to a highlight any potential problems with the property.
What potential buyers need to do is commission a Homebuyer or Building Survey which will highlight any structural problems or urgent defects.
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One North Staffordshire property investor, Kevin Bryan, pictured, who runs a motorcycle training school at Britannia Stadium, says: "If you do not know what you are doing it is definitely worth paying a few hundred pounds for a proper survey. You will get a written report which outlines anything which needs doing.
"It helps you to budget, and if you are bidding at auction you will know what price you shouldn't go above given the extra cost of repairs. It is money well spent."
John Halman, RICS North West spokesperson, says: "Older properties tend to need a lot more than redecorating or a new bathroom to bring them up to rentable condition, making a fuller survey a worthwhile investment.
"Typical building or structural faults include dry rot, blocked drains, rising damp and fractured support beams – all of which can lead to landlords being without a tenant for several months while repairs are being carried out, and it could be even longer if subsidence is discovered."
According to the Building Cost Information Service (BCIS), private landlords could end up paying tens of thousands to resolve faults. For a four bedroom house, a significant damp problem could cost anything up to £28,000 to repair, while subsidence could cost around £24,000 to correct.
David Dalby, RICS Director of Residential, says: "Estate agents act for the seller and, even if they are NAEA or RICS members, they will not be able to advise purchasers of possible defects and most of the time will be unaware of any issues with the property anyway. This is why private landlords need to know what they are buying and why we're advising agents to recommend surveys to all their clients."
Landlords buying older property are advised to get a Homebuyer Survey and Valuation, costing around £400, or a Building Survey from around £700, from an RICS accredited surveyor before completing.
John adds: "The cost of a survey is a small price to pay for peace of mind and will prevent landlords from being hit with unforeseen costs. "Surveys can even be used to negotiate the sale price if any significant faults are discovered. Landlords who show surveys to insurers are also likely to benefit from lower buildings insurance premiums."
Landlords can find a residential surveyor on the RICS website at: www.rics.org/findasurveyor.