Follow the rules, use common-sense and take professional advice and you will never look back again. Here are some guidance techniques to help you survive and perhaps prosper.

1. Let us start with wanting to place your own home on the market. Go to successful local Agents first (try to find testimonials as to each Agents good record and reputation – but don’t believe everything you read on their websites).
2. At the same time consider asking for loan finance and go to at least two sources for provisional advice – perhaps even apply for a Loan Certificate in advance of selling your home so the loan finance deal can be begun asap (remember that the loan valuation is not a survey).
3. When you find a home to buy make your offer subject to loan finance/verification, subject to contract and subject to private survey.

Q1 – Which Estate Agent?

Ans 1 – Choose three local Agents (try to match your idea of who will buy your home to which Agent might most appeal to that profile of Agent: EG: if you think that a family will buy your home from your nearest Town, perhaps a family wishing to get out “of the smoke” then it might be important to choose an Agent who has a satellite Office in that Town).

Get each budding Estate Agent to commit to paper what they think they could get for your home, how soon and how they intend to market it (see below). Look very hard at their terms of business.

Q2 – Marketing Plan?

Ans 2 – Get a written commitment from the Agent about when they are going to advertise your home, how and in what papers and magazines? Perhaps even get them to understand and agree a time limited sole rights to sell your home but after that period they be dismissed and no costs or charges will be paid unless you have agreed an offer that came via their agency services. A good Agent would agree to this whereas a dodgy Agent may not. This tactic may also get the Agent to actually tell you what they really think you might achieve – the actual value rather than what they believe you want to hear.

The Agent must produce full Property Details: this must mean several colour photographs, a room layout plan, the Energy Performance Certificate and all usually provided location, features, services, dimensions etc.. for room listing data. We would also suggest that the details provide a simple listing of all guarantees and planning documents that are in your possession and are valid (why not tell potential buyers something of value to help sell the house? Why not tell potential buyers where they can safely park their cars when viewing?).

Q3 – Instructing your Estate Agent.

Ans 3 – No sell, no fee is the way to proceed. Also never give sole selling rights – at best give Agents a clear run at selling your home but retain the right, at any time frame and at no cost/penalty to you, to instruct other Agents (but do not do so yet). Also make it very clear that should somebody they introduce to you, who visits your home but does not bid and then bids AFTER you have dismissed that Agent will mean the old Agent gets no commission (you will need to specifically agree this – in writing).

Q4 – Which Solicitor?

Ans 4 – This very much depends on the type and age of your home but I am not in favour of these massive Call-Centre type regional offices, especially those that are linked to loan companies or Banks.  I am also a believer in keeping this decision out of the ambit of the estate agent as just too many potential conflicts of interest can otherwise cut in to your potential detriment. Buy and sell via an Agent but that is all – do not buy any extras.

Call Centres are fine if you have a simple home, with a registered title, nothing unusual or altered and located in an area without any flooding, coal-mining, contamination, radon gas, mundic or other such issue. However, for the most part a local, experienced but young Practice is to be preferred. A Practice that is not too busy, does its homework long before exchange of contracts is due and is well connected with local, independent Surveyors. A Practice that goes on even if the lead staff member is ill or on holiday.

Q5 – Found a home to buy? When should you instruct the loan Valuer and your private surveyor?

Ans 5 – Arrange finance first: get your offer in writing/verified after the Valuer has visited. Clear the finance with your solicitor and then ask when the solicitor thinks is the right time for the private survey. Never instruct the loan source (your mortgage Valuer) to do a simultaneous private survey with your loan valuation.

In my view the private survey can wait until the chain is complete and all loan valuations have been completed and loan offers verified by each parties legal team: by this route you are limiting the chances of survey expenses becoming abortive because a chain has fallen through.

Q6 – What type of survey should you have?

Ans 6 – This is a difficult question as it boils down to your personal bias, your budget, the type and age of home you are buying, the characteristics of the location of the home, how much information you need, what services you may wish to link to that inspection, etc…..

For a mainstream, fairly modern, good condition home of traditional construction and in a non-clay or non-high-risk position a standard Homebuyer Report is fine (the most popular form of survey in the UK).

However, it always makes sense to actually speak to a surveyor – not a solicitor, not an estate agent, not a builder, not your neighbour, not your dad, not a secretary of a surveyor. Call an actual surveyor and get him or her to recommend a survey product and want they will charge you for it. A real professional surveyor will ask you many questions before a survey is suggested to you. Don’t think they are being officious and nosy – they are trying to focus your attention on the right issues and to give you value for money.

Q7 – Can you use your private survey to re-negotiate the purchase price on your next home?

Ans 7 – Yes, you can. Once you have your private survey do not be frightened to call the surveyor to discuss the report and how you should proceed. Once you have had that discussion immediately call your solicitor and bounce the surveyors thoughts off your legal team leader. This will give you the confidence needed to get stuck in and start a process that might just save you a lot of money (this is the point where you begin to understand the benefit of a good solicitor and surveyor – they can save you thousands of pounds whereas a Call-Centre probably will not).

The rest is in the lap-of-the-gods. Good Luck.

Stuart Parrett at PROinspect Consultancy provides free advice via his website at www.proinspect.co.uk -alternatively initial calls and product quotations are also free (078 3636 3040).

What have you got to lose? A lot if you get your team choices wrong!

PROinspect – surveying to protect you and your investments.

THIS WAS E-MAILED RECENTLY – ANOTHER SATISFIED CUSTOMER!

My latest VIDEO is a simple look at potential pitfalls when searching the web for decent professional, property survey advice. I take a quick look at “lowest bid survey fee” websites and the “panic sites” that play on your fear and sell you short. Click here to view – http://www.youtube.com/watch?v=eMrvVyu5g5A

Contact Stuart Parrett for specific advice on survey types, when to have a survey, fee quotations. See www.proinspect.co.uk

I have consistently advised clients what type of survey is best for them and when they should commission it. By this method my clients get the best value-for-money they can afford and reduce the chances of the survey cost becoming abortive (eg – because loan finance wasn’t forthcoming or was offered but under adverse terms).

At http://www.youtube.com/watch?v=xZaJ7TWsIXA I have produced another VIDEO that gives fuller information and a personal touch to the whole subject of surveys. ENJOY.

For more details or for a survey quotation in the HAMPSHIRE south coast areas, call me, Stuart Parrett on 078 3636 3040 or +44 (0)1489 896 174 or use the CONTACT FORM on my homepage.

Independent thought and action rely upon professional integrity and a genuine belief that the “client should come first”.

I passionately believe this is true and it drives my thinking and how I conduct my life. Recently I have self produced a YouTube video so I express my thinking to a wider audience. I invite you to take a look and give me some feedback.

To access the video click this link — http://www.youtube.com/watch?v=8n5Cj5yliRI

I emphasis that as a Chartered Surveyor I am heavily regulated and abide by a Ethical Code: it is not the words that are important here as it is my believe in such matters that counts – others seem, at times, to stand for a lesser code and these are the Surveyors who get into trouble and I find myself working against them in Court.

Typically I work for Buyers but increasingly Sellers are requesting surveys. the latter to flag the home has no serious faults OR to define exactly what is wrong and so begin to manage the damage to saleability and potential purchasers expectations. As stated above I also, increasingly, work against Surveyors and Valuers when cases of alleged negligence raise their ugly heads.

So- nothing is more important to anybody involved in housing than receipt of unbiased professional advice: your own surveyor or valuer should only receive a fee or commission from YOU and nobody else (often behind the scenes commissions are paid by Surveyors/Valuers for the initial introduction from an Estate Agent – an action that I strongly object to).

Remember – a loan valuation is not a survey and you are advised to separate out the private survey from the loan valuation: why would you think that a simultaneous survey and valuation could ever be in your best interests – THINK, you are telling the loan company what is wrong with your home and they may, as a result, not issue the finance you need.

The most popular form of UK survey product is the R.I.C.S. HOMEBUYER REPORT (and Valuation) but remember the stat – only 1-in-12 home buyers take any independent professional advice on purchases.

The choice is yours: buy with good advice behind you or take a serious gamble.

Take my advice – call me find out what are your survey options – the call will cost you next to nothing and you might just save yourself a lot of money or a giant headache.

Stuart Parrett +44 (0)1489 896 174 or 078 3636 3040.

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!).