James Sherwood-Rogers is managing director of Quest
With RICS launching a new Condition Survey report for the residential property market, a large drive is currently in place to educate consumers into the benefits of conducting some form of conditional survey on a property before you agree on a purchase.
Findings reported in a recent e.surv survey identified that of the 880,000 residential property transactions in 2010 (as recorded by HMRC), an astonishing 704,000 buyers did not take advantage of commissioning a survey on the property.
As a result, it is clear that a great deal of further education is required to ensure home buyers and the profession itself are clear on what condition reports are available on today’s market.
Lack of general awareness of what reports are available has been cited as a reason for the low uptake. Anecdotally, we hear buyers mistaking the lender’s mortgage valuation for a full survey.
Some purchasers are unaware that it is in fact designed to benefit the mortgage lender only by confirming that the property offers suitable security for the loan.
We suspect that there may also be a potential level of reticence from buyers who are reluctant to spend more money during the purchasing process, unaware that the Condition Survey, HomeBuyer Report or a full building survey may deliver a ROI by identifying issues that could support them in renegotiating a lower offer price.
Whose responsibility is it, however, to educate consumers regarding the extensive range of surveys that are available to them and ensure they are purchasing a property with their eyes wide open to its state of repair?
The obligation is currently with the borrower’s conveyancer. Failure for the legal professional to provide this level of guidance could potentially put them at risk of liability should a problem occur later.
The only issue with responsibility falling to conveyancers is however the timing: the legal matters are almost after the event and so will the purchaser be interested in obtaining a survey once they have already progressed so far with the transaction? Or will they see it simply as a potential delaying factor, and just another legal report and cost?
The real responsibility is not to confuse customers in the first instance as to what they are paying for and what they are actually getting. We hear the term valuation survey used and technically there is no such thing: there is a valuation and then there is a survey.
Education is therefore vital so buyers are aware of the options early on and can make a judgment at the start of the process.
What’s clear is there are many condition and property risk reports available to consumers and so it is up to professionals – from mortgage intermediaries and surveyors through to lenders and conveyancers, to advise at an earlier stage to help consumers make a better informed purchase.
