The importance of surveys on investment properties
- Possible future structural issues
- Signs of damp
- Electrical and gas safety
- Energy Performance Certificate
When investing in property, having a survey ensures that you get a professional’s perspective which is based on the property’s condition as well as its location.
There is often confusion over surveys, with many people still under the impression that because a lender insists on obtaining a mortgage valuation before they issue a mortgage offer, there is no need to arrange any other survey.
It is not always made clear enough that the valuation a lender requires is to establish that the amount you are paying for the property is a fair price and the loan-to-value being offered by the lender is correct.
When buying a property to let, there are many more things you need to consider, some of which the lender will also be concerned about, but others may not examine quite as closely as you should.
Here are the key areas property investors should have surveyed or checked prior to exchanging contracts:
Possible Future Structural Issues
During your investment you will need to set aside money on a regular basis to cover periodical large maintenance bills. Most investors plan to hold a property for 15-20 years and a good surveyor should be able to give you an idea of when the roof, chimney, windows, etc. might need repairing or replacing and some will also give you an idea of costs.
Signs of Damp
Damp, condensation and mould are major causes of complaints from tenants, so ask your surveyor for detailed feedback on any existing or likely problem areas.
Electrical and Gas Safety
In addition to having a RICS surveyor check the fabric of the property, a gas safe engineer and a qualified Part P electrician should be instructed to carry out a survey on your electrical and gas supplies and installations.
You will require a gas safety certificate (which must be updated annually) in order to let the property and, although not currently a legal requirement, it is responsible to have a domestic electrical installation certificate.
If you are buying a property with sitting tenants, the owner should have valid certificates and guarantees.
Outbuildings can provide valuable extra storage for tenants, so ask your surveyor to check and make sure they are in good condition and safe.
Discovering after purchase that there is asbestos in a garage, for example, can mean an unexpected bill for having it removed professionally.
Energy Performance Certificate
The Energy Performance Certificate (EPC) will form part of your legal purchase documentation and you need to check the rating.
Under new legislation from 2016, if it is F or below, you may not be able to let the property.
If the property is already rented, tenants can demand improvements, which you will need to pay for. Ideally, the property should have a rating of D or above, which is the UK average.
if it is below that, you may be able to negotiate money off the purchase price and should certainly ask your surveyor to advise which areas might need work in order to improve energy efficiency.
Carry these out before you purchase...
It is sensible to have these surveys carried out before you complete your purchase, as it is often impossible to tell whether there are problems simply by looking.
Issues with electrics, gas and damp can cost thousands of pounds and take time to fix, so it is better to negotiate these costs off the property’s price with the vendor before you exchange.