Are surveys better than valuations?
Statistics, Statistics, Statistics
Valuations, Valuations, Valuations?
Our Surveyors can provide help and advice with regard to home buyers reports, structural surveys, estate agents, mortgages, valuations, residential building surveys, commercial building surveys, structural reports, engineers reports, specific defects reports, damp reports, or any other property matters.
We use lots of sketches and photos in our building surveys to help you understand the problems and get the best results for you such as being able to understand any problems that the property may have and therefore negotiating a better purchase price.
We would recommend that you meet the Building Surveyor at the property during the course of the survey and speaking to them about what they have found and again speaking to them when they have completed the report.
Please free phone 0800 298 5424 for a friendly chat with one of our surveyors.
Most people buy using a mortgage
We believe that approximately 98% of the market valuations carried out, the 2% remaining are cash purchases where no valuation is carried out. However, we need to caveat this statistic by saying that there is simply no easy way of calculating this figure. The Halifax Bank, as it now is, which was once the Halifax Building Society and the Nationwide Building Society has been collecting data for many years since the 1950's/1960's we believe. This data relates to how many mortgage sales they've had but has in fact then being reinterpreted to indicate house sales and average prices and house movement in an area. However it only relates to the mortgages that these companies have sold which in turn have to have valuations, whilst if you look at either the Halifax's website or the Nationwide's website with regards to their house price indexes you will note that they say the data is amended to take out such factors as their geographical spread, which if you think back the Halifax Building Society was obviously originally in the Halifax area. The Nationwide was originally called the Nationwide Anglia Building Society. Surely the data is skewed by what products the banks and building societies are trying to sell i.e. if they are trying to attract first time buyers or the downsizers etc. Either way these are the best statistics we have that relate to the house sales and in turn of properties which have had valuations carried out on them.
What about Land Registry information?
There is also the Land Registry information on property transactions. This tends to cover most properties which change ownership, however it doesn't necessarily say whether these people had valuations or surveys for that matter. In addition to this we believe there are still some properties which are exempt from having to be registered under the Land Registry system.
A brief history of the Land Registry
Many, many years ago land was held without you necessarily having to register what you thought was your land, which in turn meant that problems could arise where you and your neighbour both think that you are in areas of land or a boundary etc, so in 1948 or thereabouts the Land Registry was started.
But what's all this got to do with valuations and surveys?
We are showing that there is no easy way to show exactly how many valuations have been carried out compared with surveys. The statistics often quoted are that 80% of people having valuations rely on these to purchase the house.
Again we wonder where the information has come from, it could be the banks and building societies who no doubt record how many people they are carrying out valuation surveys for, however how would they know if someone had a valuation with them which they have to do and then decided to have a survey with a different company. Speaking from personal experience the vast majority of our clients are looking primarily for peace of mind with regards to the property they are buying. Whilst they realise that most properties don't have problems they don't want to be within the percentage that do have problems.
Most people that we talk to want to have a building survey. We would say from chatting to our clients this is as they understand it that the banks or building societies 99.9999999 times out of 100 value at the figure the property is being purchased for. We would go further than this.
The Banks and Building Societies look at the housing market in this way
We would claim further than this that most bank and building societies are looking from the bottom up rather than the top down and they assess the property which they are not qualified to do. They are after all valuations surveyors not building surveyors so they make adjustments to the price based on what we would call bottom up prices, whilst any problems they spot may well be important for fine tuning on the purchase price that they have been given.
We would say a valuation needs to look from the top down, that you need to look at an area, understand the typical values that mid terraced and detached houses and flats achieve in that area. Look at the market conditions, how many transactions have taken place, how long do they take place for. Look at the percentage they sell at compared with the value the estate agent originally gave them. All these, we would add, are things that we look at when we carry out our valuations. We would say we are looking from the top down and in our opinion it's these important things which put the value of the property in the right ball park. It's in the fine tuning from the bottom up that we also do that gives it that exactness of price or as exact as you can get a price.
Valuations no longer pretending to be surveys?
We have noted with interest a discussion in the surveying journals about whether head and shoulders inspections should or shouldn't be included in valuations. We are pleased to see that the R.I.C.S. seems to have come down on the side of there is no need for a roof inspection at all (which we would comment as being what the valuer that's trying to look at a lot of properties may well have been doing for years anyway).
Valuers look at the value of the building for banks and building societies who are their primary client as they give repeat business
Valuer's simply do not want to get their hands dirty let alone unload a ladder out of the car and a torch to look in the roof. If anything the fact that they said they looked in the roof gave the wrong impression as can be expected most people thought that this was a thorough examination.
Today's valuation report is typically one or two, possibly three sheets of paper and it is full of caveats advising you to go and have a survey. The valuations we typically see have between one and three sheets of paper to form the valuation report and this in turn gives an indication of the limitations that this type of report can provide. However even with warnings that this is not a survey and we reiterate that we are so pleased that head and shoulders inspection of the roof space is no longer included and surely this makes it blindly obvious that this is not a survey and people still rely on the valuation thinking it's a survey as a basis of buying probably the most expensive thing they will ever buy.
Royal Institution of Chartered Surveyors surveying products package
For years and years we have developed our own tailor made surveys as we would say all good surveyors have, but recently the corporate surveying companies have been looking around for extra market work and have seen potential to move into the market of the surveys, they are after all very similar to the valuations aren't they? They are in one sense as in you are visiting a property to give a comment on it but they aren't in the sense of the skills required. This means in our opinion that Valuers have to have pre-packaged products as the Royal Institution of Chartered Surveyors are now developing. Whilst we applaud them in one sense as it gives a minimum standard, we have seen some atrocious surveys over the years. We did indeed deal with claims against Valuers at one very large building society that has now become a bank. Some of them are quite simply indefensible. You can see that many surveyors are quite simply out of their depth and here where they have a framework to work within it will in a lot of cases help them and in turn their clients. We do though in theory think that this fits into Pareto's 80/20 Principle where 80% of the time these formats will fit however it's the 20% of the time when they don't that there will be problems and how will you know when you are in this 20% of the time?
Valuers are regulated and as such you should check if the person carrying out your survey is a regulated valuer or not. If they are you then need to question are they suitably qualified to carry out a survey i.e. are they a qualified building surveyor. If they are they will then have the designated building surveyor.
If you truly do want an independent expert opinion from a surveyor with regard to valuations, mortgages, mortgage companies, surveys, building surveys, structural reports, engineers reports, specific defects report, structural surveys, home buyers reports or any other property matters please contact 0800 298 5424 for a surveyor to give you a call back.
If you have a commercial property, whether it is freehold or leasehold then sooner or later you may get involved with dilapidation claims. You may wish to look at our Dilapidations Website at www.DilapsHelp.com and for Disputes go to our Disputes Help site www.DisputesHelp.com .
We hope you found the article of use and if you have any experiences that you feel should be added to this article that would benefit others, or you feel that some of the information that we have included is wrong then please do not hesitate to contact us (we are only human).
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