THE continuing buy-to-let boom, coupled with the shortage of houses for sale, means landlords have little choice but to buy properties which need work. But, warns Royal Institution of Chartered Surveyors, they need to know what they are buying or their investment could turn into a liability, costing them thousands.
A common misconception is that a mortgage lender’s valuation report represents a survey. In fact, it is merely a valuation carried out on the mortgage lender’s behalf and is not designed to highlight any potential problems with the property. By commissioning a Homebuyer or Building Survey, any structural problems or urgent defects are highlighted, enabling the buyer to make an informed decision.
Chairman of the Yorkshire and Humber board of RICS, Rob Hindle of WHP Building and Project Consultants says: “Older properties tend to need a lot more than redecorating or a new bathroom to bring them up to rentable condition, making a fuller survey a worthwhile investment. Typical building or structural faults include dry rot, blocked drains, rising damp and fractured support beams - all of which can lead to landlords being without a tenant for several months while repairs are being carried out, and it could be even longer if subsidence is discovered.”
According to the Building Cost Information Service (BCIS), private landlords could end up paying tens of thousands to resolve faults. For a four bedroom house, a significant damp problem could cost anything up to £28,000 to repair, while subsidence could cost around £24,000 to correct.”
David Dalby, RICS Director of Residential, says: “Estate Agents act for the seller and, even if they are NAEA or RICS members, they will not be able to advise purchasers of possible defects, and most of the time will be unaware of any issues with the property anyway. This is why private landlords need to know what they are buying and why we’re advising agents to recommend surveys to all their clients.”
Landlords buying older property are advised to request a Homebuyer Survey and Valuation or a Building Survey from an RICS accredited surveyor before completing. The Homebuyer Survey provides a detailed and concise report, highlighting any significant problems that could make a difference to the value of a property. A Building Survey provides in-depth details on a property’s construction and condition - it is particularly useful if the property is dilapidated, has been extensively altered or if the landlord is planning a major conversion or renovation. Condition Reports start around £200, a Homebuyer Survey and Valuation around £400 and a Building Survey will cost from £700.