You must know about the condition of a house before you buy it.
In this position, a property condition report is extremely useful.
This article explains what a property condition report is and how much it costs.
What is a property condition report?
A property condition report gives you in-depth feedback on the condition of a property. This is done by a qualified expert, usually a RICS-qualified surveyor.
There are several different types of property condition reports.
A level one report only covers the basic features of the property, while a level three report gives far more detail. (You can see more about this below.)
Even with the most basic level of report, your surveyor will look at:
- Energy efficiency
- Materials used to build it
- Issues, potential risks and/or damage
- Gas, electricity, water and drainage
- Structure of the building.
These reports will typically use a traffic light system to describe whether a feature is in good (green), average (amber), or poor (red) condition.
This gives you an instant perspective on whether something needs your attention.
Different types of property condition report
Level 1: ‘Property Condition Report’
It’s usually the homeowner who pays for this.
It covers all the essential details about the house and is designed to reassure buyers that it’s a great investment.
This is the least expensive type of property condition report. It will often be done in 2 hours and costs about £400.
Level 2: ‘Homebuyers Report’
This is statistically the most requested type of property condition report.
It’s done by someone interested in buying a house at their own expense.
It goes slightly more in-depth than a level one survey, focusing on more than just the house’s condition.
The idea is that this report will alert you to anything wrong with the property that hasn’t been picked up.
This can then be used in negotiations to get a better deal. It may take 4 hours and cost about £500.
Level 3: ‘Building Survey’
This is the most in-depth and expensive type of property condition report.
A surveyor will look closely at the structure and condition of the property.
It’ll also research some ‘less common’ issues, which nevertheless may prove necessary, such as:
- Rights of way
- Planning permission
- Unusual building materials.
This type of report is ideal for older properties that are either ‘unusual’ (i.e., listed buildings) or in bad condition.
It’s thus not as common as the level two condition report. A level three report can take up to 8 hours and cost about £650.
Common reasons a property condition report is done
You could get a property condition report done for several different reasons.
As a buyer, getting one done is almost always in your best interest. Most experts recommend it.
Sellers will typically get a level one report done as well.
Peace of mind
When you’re spending such a huge sum, you want to know everything possible about it.
This is perhaps the most important transaction you’ll ever make. A report can be expensive, but it gives essential peace of mind.
This reassures you that it’s worth the asking price and that you’re doing the right thing.
You’ve spotted some problems
Sometimes, you’ll spot an issue when viewing a house that wasn’t noticeable in the online photos.
If you haven’t been alerted to this by the seller, you’ll want to know more.
Perhaps you’ve seen mould or dampness or thought you heard a pest in the roof.
Or perhaps something in the garden looks suspiciously like Japanese Knotweed.
The seller alerts you to potential issues
When a seller alerts you to issues with the house, this is considered a good thing.
It allows you to interpret the true value of the house.
But sometimes, if they haven’t paid for a thorough inspection of this problem, you’ll want to get it done.
You may also worry that the seller is deceiving you about the full extent of the issue.
It’s requested by another party
Many mortgage lenders make a property condition report compulsory if you want them to lend you money.
This reassures them that the house is safe to invest in and won’t dramatically lose all its value due to an unforeseen defect.
Which level of property condition report should you get?
You should speak to an expert in this area for guidance. A level two property condition report is the most common.
But if you’re incredibly nervous, the house is unusual, or you don’t trust the seller, level three can give you peace of mind.
You may also have no choice if a lender instructs you to get a certain report level.
Is a property condition report compulsory?
No, it’s not a legal requirement for the seller or the buyer.
However, many major lenders make it a condition that you want to receive money from them.
In this case, you may have no choice unless you can afford to be a cash buyer.
