It is a common misconception that you do not need a survey when purchasing a new build property. Whilst new builds look crisp and clean from afar, they can suffer from just as many problems as older houses – if not more.
In a 2015 survey, 27% of buyers said their new home had more problems than they had expected. 35% said they had identified more than 10 problems; and 20% said they had reported more than 16 problems.
Many new build buyers opt for the minimal valuation survey that their lender requires. In fact, this type of ‘survey’ isn’t a survey at all – despite often costing the borrower £250 – £350, it’s just an inspection of the property to see what it’s worth. The report tells a mortgage lender whether or not the property provides sufficient security for the loan. It will make some general observations as to the condition of the property and highlight any glaring structural defects, but it won’t go much further.
Another type of survey that has proven popular is the free valuation surveys offered by lenders as part of their mortgage packages. According to The Times, around 15% of lenders are tempting in buyers with such deals in an attempt to boost business in a less-than-exciting market. One mortgage broker told the Times that 8 in 10 buyers opt for this cheap survey to save costs. But buyers should beware: free surveys are usually automated and don’t even include a visit to confirm the property is structurally sound. Whilst these free surveys were once common for remortgages, they are increasingly being used in the new home market. This is especially so where the buyer has a fair amount of equity and the lender’s risk is therefore smaller.
Sadly, many new builds have quality issues. According to the Guardian, the NHBC (the leading UK home construction warranty and insurance provider) paid out £84.8m in claims between 2016 – 17. The papers are full of heart wrenching stories where big brand builders have left families with significant problems, months or years down the line. Social media is rife with anecdotal accounts of new build nightmares. Facebook even has a group dedicated to ‘Charles Church (Persimmon) Homes From Hell’.
The Times reported on one such case where a couple found no less than 700 faults with their home – the half-built fence outside being just one of them. The couple paid £280,000 for their Leeds home which was built by Persimmon. Since they reported the list of faults, they claim just 10% have been fixed. Persimmon responded: “Mr and Mrs Bentley’s home did not meet our intended standards.”
Which survey do I need?
The survey you choose should be based on the condition of the property.
The next step up from a valuation is the Home Condition Report, costing about £250 – but as noted above, this only looks at very obvious errors. A better choice is the Homebuyer’s Report, costing around £400. In addition to structural problems, this looks for issues such as damp and subsidence. It also recommends what repairs are required and how much they’ll cost which can be helpful when negotiating down the purchase price. Homebuyer’s Reports are suitable for both older and new build properties.
If you’re buying a new build you should also consider purchasing a snagging survey. These cost around £300 but they are well worth the extra expense as they help you identify every little issue that you can reasonably raise with your builder.
For very old properties or those which have a thatched roof or timber frame, a more expensive building survey is recommended. This costs in the region of £500 to £2,000 but can help you avoid a costly mistake.
If you’re still not sure which survey you need, speak to a solicitor for advice.
I’m in a new build and I’ve got problems – what can I do?
The Homeowner’s Alliance has a list of next steps to take if your builder isn’t responding satisfactorily to your snagging claims. You may wish to speak to a solicitor to discuss a way forward – both mediation and a legal claim may be options available to you.