Archive for the ‘General Updates’ Category

Let me grab your attention……….

Which of these is the most astonishing statistic or comment (all are true)?

• Only about 1-in-10 home buyers get a private survey completed.
• Only 28% of Listed Buildings are insured: 55% are under-insured.
• 25% of all land is not “registered” despite registration starting in 1925.
• UK Housing stock is the oldest in the developed world.
• Only 1% of our housing stock is EPC Rated “A” or “B”.
• In 2001 new house building fell to its lowest level since the war.
• Social demographics reveal that although one-person-homes made up 19% of total housing stock in 1971, this stat increased to 31% last year (2010).
• Houses (NOT flats) represent 82% of the dwelling stock in England.

To me, two statistics leap out of the screen and shout at me:-

As a Surveyor I just do not comprehend why 9 out of 10 homebuyers do not get unbiased, independent Survey opinion. Surveys have proved to save buyers money (typically a x5 saving in relation to fee costs, perhaps a great deal more).

As a home owner and residential Surveyor I also find it staggering that only 1% of our total housing stock is reasonably good in saving energy or reducing carbon emissions.

It may surprise some readers that the trends towards desktop valuations, as opposed to visit-the-home-and-produce-a-real-valuation, is rapidly gathering pace such that soon buyers will not have anyone look at their purchases unless they can be educated NOW and elect to pay for independent opinion (always separate the loan/mortgage valuation from the private survey – these are two separate matters and only one is a “survey”; the survey should be completed after the Loan Valuation and loan offer is received, in writing ).

At any one time the forces and influences that combine to determine value or worth of an asset are shifting. Today we are entering a period of years whereby carbon footprint and energy performance profile will assert themselves and create a valuation premium.

Like it or not we will all need to far better understand the process of home buying and just what actually creates value.

All the usual candidates remain: a “top five” may look something like this–
1. Location
2. Condition
3. Size
4. Features
5. Modernity (in some cases)

However, word is out NOW that two new candidates are in the top five listing. These are:-
• Carbon footprint to build, plus
• Carbon and Energy footprint to live in.

These factors create “sustainability” and that state may help save our planet and help us save money (energy costs) into the long term future.

Fit-in-Tariffs and RHI (Renewable Heating Initiative) are just two examples of current schemes whereby the Government will underwrite an annual income to you if you change away from, or significantly reduce your consumption of, fossil fuels.

A Home Valuer must nowadays consider and reflect upon whether your home was carbon neutral in its creation and also whether it has a zero-carbon in-use footprint. Did non-sustainable trees and resources need to be expended to produce the home AND/OR can the home produce energy savings (or even create an energy flow into the national grid – an income stream) by clever design, systems and gizmos?

From now onwards these latter mentioned matters will rise and rise and create a new slice of home value leaving your own existing outdated home on the floor as far as “worth” is concerned. This process will be slow but would be kick started if loan and mortgage rates were switched to be lower if your home actually sold energy to, rather than used energy from, the national grid. Differentiation in favour of green homes cannot now be too far away.

Beauty, they say, is in the eye of the beholder. Buyers looking at identical homes, but where one has a Government backed 25 year income stream attached to it and will probably sell for a higher capital sum will be considered more valuable today. For buyers to see the worth of such new initiatives means they must understand what is happening around them and this can only start by education: reading this article marks the start of that process.

So: Read the EPC (Energy Performance Certificate) on the home you wish to buy (this remains a mandatory document on any sell or letting in England). Find out how, and at what costs and future benefits, you could improve the structure and its services to create income and higher value/worth. Plan how and when you could achieve this.

Take energy seriously and take extra value from it.

Why choose an independent House Surveyor? Why choose PROinspect?

 

To those who have experienced the reasons why a Surveyor can make a big difference to a housing transaction I apologise for wasting your time. For those who look for cheapness and do not care who acts for them may I suggest you slow down and study the advice given below.

All Home Condition Surveyors should be at least working to a basic level of competence, carry at least the minimum level of insurances and have kept themselves reasonably up-to-date professionally and technically: the latest buzz words being Technical Due Diligence, or TDD.

 

Therefore, on the face of any one particular housing deal all Surveyors are equal.

WRONG. Some are more equal than others and provide a truly exceptional level of service designed to aid you to a swift and knowledgeable exchange of contracts with you in full control. Some are stuck in one gear and no matter what you want and need you will get what they always do: often this type of Surveyor is difficult to contact and is “protected” from client calls by a host of secretaries and customer services people (try attempting to actually talk to such a beast and you will see what I mean).

 

If all Surveyors train and generally work to a similar standard why do I need a better standard? Credit Crunch should have taught you what Bankers think of customers and how they cannot even make loans and mortgages on terms that most of us could even dream of finding acceptable. Self-interest is what I am defining: interests of the Bank are more valuable than mere customers interests. The same can be said of a lot of Surveyors.

 

What you need is a professional adviser who understands you, why you need a survey, what is happening in the marketplace and “know” the home type you are buying. Somebody who understands how most purchasers will not appreciate the mechanics of the chain of things that could go wrong and what can be done to protect their interests.

 

So what do I do that is over-and-above what the average Surveyor does?

 

1. I never accept a survey instruction without first personally talking to the client to ensure the product they asked for is relevant to the property and their budget. Other survey product options may be applicable.
2. I visit every relevant web-site that may give free data on the home being purchased so I have more that a cursory knowledge of the building and its history even before I see it. This allows me to easily focus on key issues and so better manage my time on your behalf. I even personalise my Site Notes template to reflect that initial property and risk-management data.
3. Where possible I interview the seller so I obtain detailed information on alterations, service histories, problems and possible disputes. This level of service acts as the eyes of the Solicitor acting for our clients.
4. In preparing your Report I pitch the words I use to my assessment of each clients technical property understanding: in other words I design advice to suit each client, as all clients are different.
5. I make sure you know that once you have your Report I am available to explain things to you, if you need that re-assurance.
6. If you need advice on what courses of action you could take I will advise you of your options.
7. If you need advice upon what Contractors to use I will make recommendations.
8. If your Solicitors or loan source need additional advice or information I can provide it.
9. If you need robust opinion to help re-negotiate the purchased price, just ask.

 

In other words, for the price of a survey you get a full Consultancy Service thrown in. I will not leave you stranded.

 

Practical, good communication is just as important to us as it should be to you. Our high service level not only helps you but also the seller because our actions do make the difference between actually buying and dropping out because “it all got too complicated”.

 

To some, our high service level is difficult to appreciate or understand. To those we have helped by these service standards we have customers for life and we have proved to be life-savers in a world of doom-and-gloom.

 

House of Horrors OR Home Sweet Home? The choice starts with who you allow to act for you. Do not get misled into requesting a simultaneous loan valuation and private survey: this is not the route to take for several reasons. Call us and we will explain.

 

Finally, let me provide a few examples of professionals who have been negligent and who cost clients thousands of wasted pounds:-

 

• Surveyor could not tell if the loft excrement was from vermin or bats: it was the latter and this caused redevelopment to be delayed nearly two years – (= technical incompetence).
• Valuer who over-valued a home by 55% – (= lack of local knowledge and quality control).
• Surveyor who did not detect that a house had been structurally underpinned three times: the effect of this was the client bought at an inflated price and was then denied Insurance cover and cannot now find a buyer at all – (technical and professional incompetence).
• A flooring contractor who laid a solid floor topped with hardwood: both failed and required replacement – (technical incompetence).
• A Solicitor who negligently conveyed a home that the seller could not then dispose of – (technical and professional incompetence).
• A Surveyor who did not know the difference between traditional construction and a home now designated as defective under late 20^th century legislation and is only worth half of what was paid for it – (technical and professional incompetence).

 

PROinspect have acted as Experts in preparing Court cases or in preparing evidence for Insurers in these and many other such cases. We are as pleased to act for you, an individual, as for acting for a large Company. Our standards do not vary.

 

High fee cost? Well no; we hope we are not cheap but above all we plan to be the best value-for-money. Many say we are safe-pair-of-hands in a wicked world.

 

Why chose an independent Home Condition Surveyor? It pays to not take the chance that cheap may be beautiful. You need expertise and certainty. We provide professionalism and robust, practical help.

No, not a legal run-down on what to do or not to do. Instead, a few words of wisdom to help you ensure “your X, or other-half” does pull a fast-one on you as far your joint Home is concerned.

I often get calls along the lines “Mr Parrett? I saw your web-site and need some advice. Can you help me?” The following comments distill these calls for help into a few Rules to protect yourself :-

1. Never agree to anything you do not fully understand.
2. Always take legal opinion, if at all possible.
3. When the time comes to VALUE THE HOUSE the following may help you —
   • Do not panic when your “other half” starts quoting strange fictional things about the house eg: “you do know it has got subsidence and isn’t worth much?”. Rise above such tactics and do not respond.
   • If the Valuation is organised through Solicitors you may be asked to provide two names of valuers you would be happy to use. Find two local Chartered Surveyors who specialise in Valuations (call the Royal Institution of Chartered Surveyors in London if you are stuck). I prefer smaller firms to the larger ones. The more local the better. Your legal team will negotiate with your partners legal guys until a mutually acceptable Valer is agreed.
   • If I was one of these Valuers I would pre-quote 150% of my normal Valuation fee rates and charge each party 75% of that rate (you each save 25% of a normal Valuation fee).
   • Payment would be expected “up front” as in any dispute situation.
   • If you can be on-site when the Valuer inspects this is to be preferred – in case questions arise.
   • If Solicitors are not involved then attempt to get written agreement from your partner that a particular Valuer can be instructed jointly. You would need to get fee quotes and do not forget to tell each Valuer the purpose of the Valuation (“Matrimonial Proceedings” is the terminology used and include in your instructions that it is a joint instruction and ask if two Invoices can be generated – one for each party).
   • Be friendly to the Valuer and have copies of any guarantees, plans, warranties, boiler service plan papers etc…. ready when he or she arrives.

Often when I am on-site, and usually when only one party is present (not both husband and wife), comments are made that could be construed as “attempting to get at me”. I am immune to such attempts and would say that at the human level they can easily go against the person making them. This shows that whoever you instruct must be of strong character and of robust constitution. This is yet another reason why it is vital for you to actually speak to the Valuer who is to inspect your home (and not a secretary or other such Agent or middleman).

The “good Valuer” will only include Report comment if he or she is convinced it is factual and important. However, where some doubt exists, and if the information is vital or may affect the tone of the Valuation, the information may be included but with a reference as to where it came from and why anybody reading the Report must strictly verify the information before any agreement is reached.

Valuations for Divorce or Matrimonial Proceedings are not for wimps: make sure you don’t use one.

With massive increases in fraudulent claims, Insurance Companies being hit by multiple natural disasters and premiums levels fluctuating widely, can you control the risks that are inherent in owning or occupying residual property?

Picture the scene – you have just opened your annual renewal documentation and the premium seems reasonable. What do you do? Some will hit the “Go Compare” websites and get cheaper premium quotations. Some cannot be bothered and simply file the paperwork (doing nothing is a great option as this usually means your policy will be automatically renewed).

What is wrong with this little scenario?

The answer is “nothing”, in many cases. However the right answer must be based on your own particular circumstances. I would argue that never has a time existed whereby are you more strongly recommended to STOP, THINK and REVIEW before you decide what to do.

Question ONE – Has the policy cover changed in any way OR does it include all that you need? Often the excess payment is incremental based on what is being claimed; Often the list of exclusions has been extended but you would need to very carefully read the small print to find such changes; often cover has been limited in some way. You need to make sure that you are getting value-for-money before you decide to renew.

Question TWO – Have you completed any works, improvements, alterations that either increases what needs to be covered or which might adversely affect the Buildings Insurance Company view of what risks they are taking in extending cover to you. Remember you are under a duty to inform Insurers if anything has changed or is unusual.

These two questions are fairly simple but do you know the real import of them? Do you know what might happen if you ignored the ground rules, buried your head in the sand, renewed blindly and then had to make a claim during the next year?

Firstly you have to understand what insurance is not. It is not a cover-all-get-out that absolves you from well maintaining your home. If you have something that you know is going to wear out after a finite period, you ignore it, it fails and causes house subsidence, are you covered? Probably not but this is a grey area. EG: If you have underground drains made from pitch-fibre your drains will fail very quickly now because we know they have not stood the test of time.

What would happen if you planted trees over your drains or too close to your home and in ten years time the tree roots cause damage that results in house subsidence – are you covered?

What happens if you completed an attic conversion, installed a Conservatory, replaced your old, single glazed windows with state-of-the-art double glazing and you fail to tell Insurers and then have a claim that includes these items? Are you covered bearing in mind your cover did not reflect the added cost of these items?

If your insurance level was correctly assessed many years ago and has been index-linked ever since and you make a claim and Insurers say you are under insured and will not pay out the full amount to reimburse you? Have you a case for complaint or not?

If only the answers were simple.

First let’s put to bed a few myths: The home value has nothing to do with the correct “sum insured” for Insurance rebuild purposes: Index-linked policies can easily get out-of-sync over the longer term (leaving you either under-insured or having paid inflated premiums unnecessarily).

In recent years some Insurers have decided to de-complicate Buildings Insurance and simply tell you that having taken data from the Loan Valuation Report they automatically insure your home for the correct amount. This is great, provided the Loan Valuer has got it right (and do not forget that often you do not nowadays get a copy of the Valuers Report to be able to check these things).

In my own case my Mortgage Company simply stated that my home is now insured as a two bed house. I explained to them it was built as a three bedroom home but that I use it as a two bedroom home. After eight years residence here I still cannot get a simply letter to categorically state that I am not under-insured (anything a staff member cannot understand gets placed at the back of the queue and is never actually answered).

So – how can you cut though all this nonsense and ensure you have good, effective cover?

In fairness the Insurance Company industry has begun to get its act together but with increased competition for short term customers (introductory deals that are not renewed OR companies placing the best deals with new customers rather than with loyal existing customers) we are all changing Insurers with greater frequency.

Upon your annual Buildings Insurance renewal PROinspect suggest a STOP and THINK policy review would be wise. The following questions are core data needed to assess how you approach your Buildings Insurance renewal:-

1-  have you improved your property in any way?

2-  does anything influence your home or has that degree of influence materially increased?

3-  have you adequately maintained your home so as not to allow risks to develop?

4-  if your cover is index-linked, how many years has this indexation applied?

5-  has the offered cover changed in any way at all compared with last years cover?

6-  if you have gone to a Comparison Website are quotations all on the exact same basis?

7-  do you live in/on a floodplain?

8-  do you live in an area of shrinkable clays?

9-  is your home and site liable to surface water flow damage (not associated with sea and river flooding)?

10-  do you live in an area prone to coal-mining, landslip, radon gas, etc… (high risks)?

11-  have you made any claims in the last year? Have these been resolved/agreed/closed?

Whether you would be well advised to take your business elsewhere, at lower annual premiums, depends of the answers to these questions. If your home is unchanged within its risk-free location and environment then the chances are that accepting the lowest premium for an agreed and defined level of cover is just the ticket for you.

However, for the rest of us, millions of occupiers, the situation is much more complex. The rest of us must carefully weigh Premium quote –V- Degree of Cover –V- Risk Assessment (of your own home and what affects it).

The quote is a given (assuming you have fully declared all relevant information to Insurers); the degree of cover is a given (but look out for small print changes or exclusions); what is not a constant is the Risk Assessment aspect of the renewal.

At what stage does increasing vandalism in your housing district need to be declared to Insurers on renewal?

How do you know if tree roots are affecting your drains if when you flush the toilet the waste goes away freely?

If your home has never flooded, and is not in or near a floodplain, how do you know if your home is at risk of water damage due to exceptionally high rain storms due to climate change?

The name of the game is to know you are one step ahead of Insurers and you do not place Buildings Insurance cover at risk. To achieve this you must understand what influences both insurance premiums and your home.

Let me explain one further aspect to consider: you have a nice home and have never had any problems or made any claims. On renewal you consider the premium quote is too high and go elsewhere knowing cover is slightly restricted but you will be saving £150 during the year.

Suddenly, nine months later, your home begins to crack and distort – you have subsidence. The Insurance Company Loss Adjuster says structural underpinning of the house foundations is needed plus many reinstate works. The cost is £75,000. Your excess payment is £1,000. However, then your troubles really begin . . . . . .

Insurers say that the cause of the subsidence is a fractured drain caused by excavations associated with the paved patio you laid yourself behind the lounge after you had a large tree removed. This work was completed 18 months ago – 6 months before you changed Insurance Company. In essence the cause of the damage, and claim, pre-existed the start of the Insurance cover and you did not declare the risk.

If you were under-insured by say 25% then any claim at all would be reduced by 25%. But, in the example just quoted above the Insurance Company could decide not to honour your claim at all. Conversely, new protocols between participating Insurance Companies might mean that if any liability is accepted then the current Insurer will pay part and the previous Insurers a further part.

So, a summary might be to say that premium level is not everything. Look beyond the premium, check the degree of cover and then Risk Assess your home and what influences it. Have you done anything that might trip you up later on when you have to make a claim? However, if funds are low and you have no alternative but to look for the cheapest possible premium quote then do so but whilst perhaps setting certain minimum degrees of cover for certain risks.

Unfortunately we have recently entered a period of high subsidence risk due to low rainwater rates over the last year or so. Cyclical patterns suggest subsidence rates will soon soar and so changing Building Insurers might just be one risk too far if you live in a clay based soil area.

At PROinspect we ensure we consider any survey completed for customers includes appropriate advice about Insurance risks of flooding, storm damage and structural movement. By this route you can reduce the risks you take. In exceptional cases we might consider the risks are so real and high such that Market Value is adversely affected – our report opinion of Value may enable you to purchase at a discounted sum to allow for such risks.

Regular car inspections and vehicle maintenance is mandatory so why is a home NOT subject to periodic safety, energy, thermal insulation and environmental standards regulation as well?

In an increasingly PC world why do we allow energy to be wasted and home owners to allow property to fall into a potentially dangerous state or one that is prejudicial to healthy living? Also remember that a vast number of UK homes remain empty for many years for no good reasons.

Should not society produce radical solutions likes home-owners having to state how many people have resided at their house (how many days per year, per person in relation to bedspaces available) and what energy costs were paid out for those people for that period. This would be one possible method whereby we begin to see which homes are falling behind – it would begin to tag “at risk” homes.

Recently Google completed the systematic recording of most streetscenes in England for its Google Streets initiative. Think of the cost of this! On the basis that homes at risk of falling into ruin are usually easily identifiable from the outside then it does not take a lot of imagination to realise that most sub-standard or at-risk homes could be identified by either simple human viewing of the front exterior (some flats being the only exception) and/or by means of mobile thermal imaging techniques.

If the above is correct then we can now easily identify most homes at risk and therefore target advice, help and perhaps grant finance. So why is help not always at hand to those who need it most? Why do so many buildings remain in poor order or even vacant for so many years?

Four reasons – finance, red tape, lack of education and lack of motivation:-

1. Society cannot motivate itself sufficiently to care enough.
2. The do-gooders produce solutions then fail to re-educate occupiers in ways to ensure good health and a good environment: often this is as simple as telling occupiers how to reside at any particular home in order to avoid condensation.
3. When we want to help often society often throws up NIMBY objections, Planning Rejections, Building Regulation disapprovals, etc… Red Tape bogs down initiative and solutions and therefore saps at our good intentions.
4. Money makes the world go round but when the needy require property help often the red-tape within the public systems employed to help those in need causes massive profit taking or sub-standard untimely solutions.

I do not wish or seek to belittle the massive help that many organisations can and do deliver to the least well off but what does bother me is that the resources and finance available to help those in need is so fragmented and disjointed that it comes a poor second to, say, the resources put into creating New Build projects for those who can afford a nice environment.

Are our resources and systems out of balance? Yes, I believe they are and that we need to re-consider how support mechanisms operate in future. A fundamental rethink is needed and this starts with early identification of poor housing so our housing stock is systematically improved (worst home owners having their properties taken away from them at discounted rates where no just cause of that property decline can be provided).

Some of you might say: nothing new in the above. I say yes, this is a radical solution because it seeks to identify problem cases before they reach that state whereby they are beyond economic repair and help whereby occupants are immediately displaced. The whole thrust of care becomes focused at the preventative stage before the state has to re-house the victims within our society.

Annual energy and occupancy housing returns linked to visual or thermal imaging generic surveys in identified worst cases. What do you think?

If you need advice, perhaps a review of your own portfolio of homes, or a consultation to take stock of where you are going with housing, why not call me for a chat? Stuart Parrett 01489 896 174 or use the CONTACT FORM at www.proinspect.co.uk.

HIPs are dead. A new Government is in place. Power to the People seems to be high on the agenda. The Economy is stuttering forward. Our football team ….. well, enough said! What now?

Over the last few months I have helped and overseen my Parents sell their home of 48 years standing and buy a home down-market. The key areas I want to talk about include —-

1. Choosing an Estate Agent
2. Deciding what information, and in what form, we could produce to help speed a sale through.
3. The Solicitors and dealing with buyers in the chain.

Being a local Surveyor/Valuer all the Agents wanted my Parents instruction. I advised my Parents after considering who would be buying their home and matching that “profile” to the sales record and “typical profile” of each Agency. A sole agency was agreed and a marketing strategy and what advertising would be completed. That was fairly easy but it did emphasis to me that all Estate Agencies are different and use differing tactics and skills to package themselves in order to obtain selling instructions. We ignored those tactics and looked under the surface to see what real skills each Agent had. We were not displeased with our final choice – in fact the Agent was simply brilliant throughout.

Next my Parents and I sat down and filtered through vast amounts of paperwork collected over 48 years. We defined several key documents that our own Solicitors would need – Planning Permissions and related Building Regulation Control Approvals with original Plans, Guarantees etc…. Again, this was easy.

Legal FORMS duly arrived and my Parents had to tick boxes for this and that and decide what was staying and what was to be taken away with them (not always easy to decide).

Eventually, and quite quickly because we had the price right to achieve a disposal, a buyer was found: in fact the whole chain was only three properties long and the top end was “empty”. Simple? No, not quite.

The chain was assembled quickly. What then did not happen was all three Solicitors meeting to decide a plan to achieve a simple and pain free transaction and to then inform the home owners of that plan and what to do if things became problematic. Instead a date was set for exchange and only at that point did all documents get a thorough scrutiny. That scrutiny revealed that elderly Parents had missed ticking that their home had mains gas and electricity (heating was via mains gas and the utility room is dominated by a floor standing large gas boiler and flue plus the Estate Agent details state all mains services are connected + the home has light fittings and power sockets for electrical gear). My Parents buyer and legal adviser could not accept the risk that my Parents home may not have these services and exchange was delayed until they could tick the boxes and return the Form.

Next came the Tree.

Now this is a fairly massive Wellingtonia that pre-dates the house by about 100 years. It is well within “influencing distance” of the house and drains and because its roots were causing damage to the public road outside my Parents house I declared that problem to the buyer whilst also pointing out the only cracking (minor) to the house.

The buyer chose to not have any private survey completed because the house was going to be adapted, expected and very significantly refurbished after detailed Planning Permission and Building Control applications were passed.

My Parents had no knowledge of buying and selling and were highly nervous of what to expect with each solicitor delay the degree of stress increased. The delays experienced were for many causes, including some via my Parents lack of knowledge and understanding.

The house my parents were buying was empty and when exchange of contracts was finally agreed they wanted to get Builders in to complete fairly minor works such a new Sink, one room to be redecorated, minor re-wiring, etc…. but the sellers only gave us a few days to arrange and complete this. This meant that when my elderly Parents actually occupied they went into a bombsite rather than a nice interior adapted to their medical needs.

I am not ranting here: this is not a witch-hunt. Instead I am trying to square the actions and needs of many people and comparing this with the service levels we received from several sources and attempting to ask and answer “is this how people should treat each other in this new century?”.

I have not mentioned the story of how one Agent nearly sold my Parents another home only to see that Agent shot themselves in the foot and those actions costing my parents several hundred pounds is abortive fees. Indeed, the above overview only details main events – many tales of delay and outright stupidity staggered me then and now.

HIPs were poorly designed and lacked the one thing that could have added true value to data exchange – a seller survey that the buyer could rely upon and sue if found to be bias or inaccurate.

In my simple, humble opinion, many changes are needed to regulate buying/selling and to put service levels and common sense at the heart of things.

Buyers must prove they have approved/sufficient funds available before any sale can be agreed. Yes, this means Mortgage Certificates need to be introduced coupled with a professional assessment of what value that persons existing home may achieve shortly. By this method an Agent and Seller could assess the real, effective buyers.

Agent Details should be of greater detail and anything printed thereon should be guaranteed (honest errors excepted) by that Agent before they can market any home. HIPs had a high legal content but the data was presented in a gooble-de-gook way. Environmental Data was similarly presented such that at one stage my own business was getting multiple phone calls each week from buyers asking for a translation service! If the usual legal Forms were also prepared by sellers, and checked/verified by solicitors, BEFORE the home reached the market then the period between “offered accepted” and “exchange” would greatly shortened and both hassle and red-tape would be reduced.

I do not hold to the view that this causes unnecessary costs and delays to marketing homes. Of course I am biased in favour of seller surveys but the over “greater good” is served if such changes were made. It just cries out to me that the existing selling system we have reverted to simply panders to the Agents rather serving the client, the great British Public, buyers and sellers.

Mortgage Lenders and Solicitors plus my own controlling body, the Royal Institution of Chartered Surveyors have a great deal to answer for in turning the defunct HIP opportunity to achieve real social change into a farce that was eventually scraped. If the public truly believes our current house buying system and both Agency and Legal service standards are adequate then, like Diego Maradona, I will run naked through the streets of my home town.

I would love the hear your views if you have recently bought and/or sold your home and especially if you had problems that required solutions to be found.

Buying a home is already clouded with obstacles so why do we put up with additional hurdles introduced by some Lenders? This article outlines just one way the paying customer can be placed second to corporate practices that serve to mystify what should be a simple process.

I was speaking to a loan valuer recently and he mentioned a bizarre situation that cost a purchaser many hundreds of pounds in fee costs.

The Valuer (Bob) was sent a property loan valuation instruction on a Victorian house in the south of England. On inspection Bob noted that the rear kitchen/bathroom wing of the building was constructed in half-brick form, common for the period in that district. Technically this part of the home was below habitable standard notwithstanding these walls had been weather-proofed externally and set internally with a dense render. The ratio of sub-standard wall to cavity full-standard walling was about 20 per cent.

Bob prepared his report in accordance with that Loan Company’s Valuers Manual and they accepted it and offered the client purchaser loan finance accordingly.

Unbeknown to Bob as his report was being considered the client purchaser decided to change lenders for a better interest rate just announced by Company B. Ten days later Bob received, by pure chance, the instruction to value the same home again.

Bob prepared another report. However, this second report was very different from his previous report. The second report simply said that the home did not comply with that Loan Company Valuers Manual criteria and was declined as being acceptable security. In other words no loan could be offered.

The reason behind this change in adequacy of security was stated as being that the wall construction was sub-standard and the Loan Company did not lend on sub-standard forms of construction.

Bob had been paid £400 in total for his two inspections. The client had paid over £700 in total mortgage application fees. Estate Agents in the property chain were many thousands of pounds out of pocket on lost commission charges. The rippled effect caused these individuals, and many others, massive loss of revenue, waste of time and effort plus related stress and disappointment.

Who was to blame for this bizarre situation?

It may be unconventional but I believe it is the Loan Companies en-mass. The Council of Mortgage Lenders, the body that regulates loan lending, considers allowing individual companies the right to have differing lending criteria is satisfactory even if the public are not told these vital policies.

I am sure each Lender is, in the small print somewhere, under a duty to publish their leading criteria and so “it is not their fault that customers choose not to read lending terms given to them”.

So what can be done about this bizarre situation?

This is the easy bit but is something that seems to always be talked about but never completed.

How about we properly regulate Estate Agents including the introduction of standard examinations upon a syllabus that includes construction recognition and general property compliance issues to Lenders Valuer Manual criteria. OR…….

The Council of Mortgage Lenders should be granted the power to issue only one set of lending criteria to all Valuers on behalf of all Lenders.

Any system, as is currently in place, that throws the emphasis on to a non-trained ordinary member of the public to decide matters of technicality of construction, is fundamentally flawed and unfair.

I believe the Office of Fair Trading are failing in their duty to provide effective monitoring and regulation in a marketplace that is well known for its protectionist and monopolistic tendencies that operate against the best interests of the consumer.

I also believe the Royal Institution of Chartered Surveyors has too long buried its head in red-tape to accept the real challenges before it: why have they not recognised this simple fundamental market flaw that places their membership is a rather strange relationship with the end client, the home buyer.

By the way — if the Home Information Pack scheme had had a Sellers Survey (like the system that currently operates in Scotland) included then none of this nonsense would be possible. Oh well, we cannot expect too much from weak Government and less than fully impartial market Regulators, can we?

If you have ever had a UK mortgage you will know that often, but not always, you get a copy of a Valuation Report. This report is NOT a survey and never has been. So, what is the status of the Valuation and can you rely upon it?

Let us start with the definition of Value? An assessment of what the general marketplace would bring forward and offer for the purchase of a home. It assumes certain things – that reasonable marketing has already been completed and reflects the state of the market prior to valuation.

Unless the basis needs to be different for a specific stated reason then the general valuation methodology is as follows:-

Analysis the market for similar homes – similar in terms of location, size, construction, accommodation, materials and design plus condition. Rippling out from an epicentre (the location of the home) you then look for nearest match actual sales or the asking prices of homes not sold but are on the market and available to buy. Furthermore, an analysis must be made of  selling prices of similar homes that have sold over the last six months or so. When all this has been done then the data is used to assess the subject home making allowances, both negative and positive, for each material difference.

This comparison method is an imprecise science. Indeed I would describe residential valuations as an art and not a science. When politics, Bank protectionism and potential rogue factors such as Valuer age and brought into the equation it is not at all surprising that the very large majority of UK residents remain confused over what is a survey, what is a valuation and what do I need if I am buying.

Some of the below listed factors can be both helpful or troublesome in any individual case as often we need to be protected from our ignorance. However, I for one believe that the Valuation Industry has fallen well short of educating the public on what a simple Valuation is.

So where does confusion set in?

(1) It is not a survey. No home Valuation can be termed a survey. A Survey is a detailed assessment of the risks affecting, and the condition of a home based upon a reasonably comprehensive inspection of all the component parts of the structure.

(2) No bid from a special purchaser can be reflected as this would be a special case and not general market value.

(3) It assumes that both seller and potential buyer act knowledgeably and prudently. However, this is not my own experience of over 35 years of acting for sellers and buyers.

(4) Special rules can apply. For example – if the home to be valued is brand new it is nowadays determined that the loan worth of a new home is based upon its value as if the home was second-hand (not new). It is the same principal as buying a car – in theory once purchased the car is not new and is instantly worth less.

(5) Many Developers (selling brand new homes) provide incentives for you to buy their products. Discounted this month! Cash-Back deals! Carpets and Curtains included this month! No mortgage payments for a year! No Fees purchase! You know the sort of thing. The Valuer must have knowledge of such matters and ignore the time limited benefit of such incentives. This means a possible down-valuation of the property is about to land on your doorstep. This is standard UK Home Valuation policy and procedure.

(6) Another theoretical problem is that the Loan Valuer is valuing for loan purposes: he is not valuing for YOU. This may seem rather a strange thing to say but if I bought a home and asked a Valuer his opinion of “value to me” he would ask me why I am buying. I might say that the home is next door to my parents house and it has special value to me. In this example I might be prepared to pay a premium, something extra to market value. Such a definition would be termed “special value to me” and is not market value.

(7) Market trend analysis problems. A Loan Valuation is prepared by a Valuer acting for a Loan Company assessing the worth of the property for loan purposes. If the Loan Company knows, fact or perception it does not matter, that values are about to fall, then Employer instructions to that Valuer would be to be cautious: perhaps even to down-value most cases in order to ensure customers do not go into negative-equity and perhaps be at risk of defaulting on the mortgage. By this method the Bank is protecting itself from its customers and such business methods are a potent resource it is armoury. These market and company pressures can get out of balance. The worldwide credit-crunch showed us the power of perception and protectionism by Banks and Finance Houses. The customer always came second to Bank profits.

(8) In theory you could get differing opinions of value, based on the same assessment methods (see later comments), depending on whether your Valuer is a Mortgage Company Valuer or your own employed Valuer (as well as whether your home is brand new or second-hand).

Indeed such Loan Company policies can, collectively, actually influence market value. Lets assume you own a non-standard home form with very few similar houses like it. The demand for your home may be quite restricted if loan finance is in short supply. All it would take is for the Loan Companies to come together and agree to not lend above, say 50 per cent of valuation, or if your Flat is over the lower five storeys in a block, if your home is constructed in a certain way, etc….

These types of thing have happened in the past. Financial Regulators have failed to stem the tide of Bank Power and must accept some element of blame for the consequence – Credit Crunch.

Summary? What do we need to remember in this less-than-transparent world?

• A Valuation is not a survey.
• Some Valuations will assume things different to your own circumstances.
• Loan Company Valuation policies may adversely affect the Valuation by hamstringing the Valuer.
• Never assume that because a Bank will lend to you that the property must be in good condition.
• Where a valuation variation/discretion may be exercised nearly every time that discretion will not be in your favour (it will be in favour of the Banks).

One final thought . A scenario has been highlighted to me by various hits upon my own website (worried buyers or home owners) and by my experiences with preparing Expert Witness reports for Court work. The average age of a residential Valuer is very high in some countries. I do not know the statistic but would guess that it is around the 58 to 60 years old level in England. This means that many residential Valuers are nearing retirement age. As such, it is alleged, they do not want to adversely affect their pension or employment status-quo. This, allegedly translates to over-cautious valuations, often very significantly below market sustainable values therefore limiting the loan available to you and damaging the demand for that type of property.

Just to complicate matters further the UK Valuation industry is about to let loose a new form of Valuer – somebody who analyses market data and says that the value could be between X and Y. Plus, some loan valuations are to be produced by automated means, a further extension of market data analysis rather than an assessment based upon a human actually inspecting a property. These matters will further confuse us as we come out of the current UK General Election and Economic downturn but I will not analyse these matters here (another day, another article and another Valuation!).

Surveyors get told to do all sorts of things and at all sorts of times but do you know the options available to you? Do you know how to get the best out of a Surveyor? Do you know when it might be best to speak to a Surveyor?

Everybody seems to think differently when it comes to what to expect of a House Surveyor. Here I outline what I think you might need to know for the most common case scenarios.

1. Thinking of Selling? One option is to consider placing a Home Condition Report (HCR) within the Home Information Pack (HIP) on your home. The same Surveyor could also complete the Energy Performance Certificate (EPC). The HCR is something a potential purchaser, and the Mortgage Valuer/Company, can rely upon and sue the Surveyor if it is negligent. You may think a HCR is a good idea if you wanted to prove your home was in good condition OR if it had serious problems and you wanted to define those problems so bidders did not make over-cautious purchase bids to you.
2. If you own a home that is “System Built” (or is registered under the Defective Premises Act 1972) again you may wish to consider the benefit of a Sellers Survey (HCR) to attempt to remove some of the stigma that can attach to such homes.
3. If you are considering buying a home at Auction you have a greater number of survey options. On the one-hand you don’t want to waste too much money and so you might wish to consider simply asking a Surveyor to walk around the home with you to discuss what he is seeing and to verify no major defects exist. Such a “look around” is not a proper survey but provided you can accept that the Surveyor will not produce a written report and cannot accept any liability for such a restricted inspection then you are on track to buy that bargain and have reduced your risks considerably. Alternatively, you could ask a Surveyor to produce a R.I.C.S. Homebuyers Report (that includes a Valuation opinion).
4. Buying any type or size of Home – remember you always have the option to ask a Surveyor to take an informal look around for you (often with you so you can ask questions etc…). This may be termed a pre-survey meeting at the premises. PROinspect have 15 inspections products and so we can cover nearly every customers request for surveys.
5. Buying a fairly simple, modern home – The most popular survey product in the UK is the R.I.C.S. Homebuyer Report (2010 version) – termed the HOMEBUYER REPORT (HBR). This is a product designed by the Royal Institution of Chartered Surveyors (RICS) and is the middle-tier product designed to be brief but factual. It includes a proper site inspection, survey report on condition, market valuation and an estimate of the Rebuild Cost of the building for insurance purposes. The HBR is termed a Level 2 survey product.
6. Buying a larger, expensive or Period home, perhaps in a Conservation Area or one that is Listed – Your options are a Level 2 survey product such as the Homebuyer Report (if the Surveyor thinks this is wise) or a full Building Survey with or without Market Valuation and/or Rebuild Cost assessment. A Building Survey is a top-of-the-range product and I add a word of caution- (1) only experienced surveyors should be completing such products and (2) many products exist that look like Building Surveys but are not. MAKE SURE your Surveyor comes recommended and that you have spoken to the Surveyor – one to one – before you proceed so you can get some idea of his Professionalism and general attitude.

The Golden Rules are –

• Instruct a Surveyor when your solicitor gives the OK after your loan valuation has been completed and your mortgage finance is verified (not simply offered, subject to terms).
• Always speak to the Surveyor who is to inspect your new home: do not be palmed off with only speaking to a secretary, junior assistant or office manager.
• Ask for a survey product recommendation AFTER you have provided full details of the property you are buying (age, price, number of bedrooms, address, etc…).
• Make sure your Surveyor is locally based, knows of the property construction type and is generally experienced both professionally and locally.
• Make sure you will be able to speak directly with your Surveyor after he has delivered your Report.

If your home/property is in southern England I invite you to call me to discuss your exact needs. Stuart Parrett +44 (0)1489 896 174.

House Home Flat – Property Building Structure – Surveys Reports.

What is basically happening to define these products?

House Surveyors will all tell you they all do the same things to produce property surveys. PROinspect are Home Surveyors but also Experts that Barristers/Solicitors and the Courts refer to for expert opinion on negligence and so we know what causes inferior service levels and customer dissatisfaction.

With this background we know that our formula that defines the PROinspect service level standard is second to none at all.

So what do building surveyors actually do when they get to a house, the home of a seller?

Basically – they inspect systematically all the component parts of a structure for a whole raft of defect and hazard types and then translate that into the report type requested and then offer advice on that content. It is not the “what” that matters, more the knowledge and experience of the individual surveyor and the amount of time he or she is prepared to take to compile your report. This goes far beyond a detailed site inspection.

For the most popular survey product in England & Wales this means that the following are inspected and reported upon……..

1. Chimney Stacks
2. Roof Coverings
3. Rainwater Pipes & Gutters
4. Main Walls
5. Windows
6. Outside Doors
7. Conservatory & Porch
8. Other Joinery & Finishes
9. Roof Structure
10. Ceilings
11. Walls & Partitions
12. Floors
13. Fireplaces, Chimney breasts & Flues
14. Built-in Fittings
15. Woodwork
16. Bathroom Fittings
17. Electricity
18. Gas or Oil
19. Water
20. Heating
21. Water Heating
22. Drainage
23. Common Services
24. Garage
25. Other (Outbuildings)
26. General (Site)
27. Regulations
28. Guarantees
29. Other (legal) Matters
30. Risks to the Building
31. Risks to the Grounds
32. Risks to People
33. Market Valuation
34. Rebuild Cost assessment

It is reasonable that as the Surveyor will be limited by floor coverings, linings, insulation, fittings, possessions that the report cannot be an invasive investigation after damaging the premises to take it apart to see how it is put together. Caveats will apply but these are only valid if they are reasonable in all the circumstances.

With the above in mind it becomes self-evident that the more you pay a competent Surveyor the better the survey product that you will get. We cannot, because of space limitations, elaborate on this but suffice to say it our experience that cheap often means second-rate. No substitute exists for spending time and effort before the inspection, at the property, after the site inspection and then “in the office”. Time means money.

What defines a good house surveyor and the best home survey product?

• Clear and direct communication between customer and surveyor at the fee quotation stage.
• Being informed of your survey options to get the right survey product for your individual needs (there are many products to choose from).
• Finding a truly an experienced and knowledgeable Surveyor for the locality of, and construction type of, the home to be viewed.
• Obtaining a plain language report created at the level that the customer can understand.
• Structured Surveyor/Customer communication post-report so that the customer has the confidence to proceed.

With the greatest will in the world this does not happen when customers choose big companies or when the option is chosen to combine the loan valuation with a private survey.

It takes effort for a home buyer to get the right recommendation to a good Surveyor. That effort will be rewarded massively when defects or problems are found – when the going gets tough, the tough get going – you need a robust professional on your team and that is what PROinspect are. If you get a quote from anybody other than the actual Surveyor who is going to inspect your next home then that person, and the company that they are employed by, should not be considered as worthy of your custom. Move on until you find an unbiased, true professional who you can take seriously.

If your home or property is in southern England then I invite you to call me for further opinion and advice. Stuart Parrett +44 (0)1489 896 174