Do I Need a Survey on a Leasehold Flat?
Key Takeaways
- Flats can make an excellent investment but you need to be sure of the condition of the property.
- On average, homebuyers spend £5,750 on repairs once moved into their new home according to research by The Royal Institution of Chartered Surveyors (RICS). In many of these cases these costs could be negated by simply getting a building survey before they exchanged contracts.
- Your mortgage valuation survey is not sufficient for your interests as a buyer.
The Leasehold and Freehold Reform Act 2024 was passed on the 24th May 2024, but is not yet in effect and the date for this is not yet clear. We will update our content as and when the finalised legislation is published.
Some of the expected changes include:
- 990 year standard lease extension for houses and flats
- Standardised format for service charge bills, for greater transparency
- Leaseholders will no longer have to pay their freeholder’s costs when making a claim
- Freeholders who manage their building directly must belong to a redress scheme, so leaseholders can challenge them if needed (already applies to managing agents)
- Ban on sale of leasehold houses, except in specific circumstances and schemes
- Fair and transparent buildings insurance handling fees
- Removal of two year requirement before statutory extension
While the existing act abolishes ground rent on lease extension and new leases, the new act does not cap ground rent on pre-existing leases.
5 reasons you need a house survey for your flat
1. A mortgage valuation is not enough
If you later spot a problem, under 'Caveat Emptor' (Sold as Seen) you yourself are liable, not the seller or the lender's valuer.
- A property seller is under no legal obligation to disclose faults or potential faults in a property and can never be relied upon for this purpose. A building survey is designed to catch any visible signs of problems your seller is hoping you won't notice.
- The mortgage valuation - if you are getting a mortgage - is just that: a market valuation report for the lender's benefit to ensure that a property is worth the money it is considering lending. There's no focus on how sound the property's structure is and there's no obligation on the mortgage lender to give you any information beyond the valuation price itself.
If the seller or their estate agent lied to you or said they didn't know about a problem when they did, you may have a claim for misrepresentation, but only if you can prove they lied and you suffered as a result.
16% of homeowners discover defects
In our recent survey, 16% of homeowners found defects; including 2% who were able to pull out of a bad purchase, 7% who were able to negotiate a better price, and sadly, 7% of homeowners who did not get a survey and discovered defects after the purchase.
12 of the 39 who remembered how much these defects cost to remedy spent over £5,000
Don't burn your money, book a survey.
2. Specialist knowledge of visible clues
- Unless you have considerable experience in residential building work, you will not have the skills to detect visible signs of potential faults that might cost thousands of pounds to correct. This is even more likely to be the case if you are a first-time buyer.
- An experienced RICS surveyor will have seen hundreds of properties in your area and is on 'high alert' to spot signs of rising damp, rot (wet or dry), subsidence and infestation, among many other issues.
- A RICS surveyor is held to strict professional standards, so you can rely on their expert inspection to make a fully informed decision.
- Your surveyor will be able to tell if a fault is minor and include this in the homebuyer report, thus putting your mind at rest if you are worrying unnecessarily about an issue.
3. You could save £5,000!
RICS's own figures show that 20% of home buyers who did not book a survey later uncovered faults which required, on average £5,750 to remedy.
- Your survey gives you professional 'ammunition' if you want to bargain with a vendor to pay all or part of the costs of correcting issues discovered in the survey. This 'ammunition' can be used in the first instance by your conveyancing solicitor.
- Your home buyers survey flat/leasehold may show up so many problems that you cancel your purchase. Better to spend a few hundred pounds on a survey than discover very nasty surprises after you've bought which may lose you tens of thousands of pounds in repair costs or which may make resale difficult.
4. All RICS surveyors are insured
Your RICS surveyor has to be indemnified. In the unlikely event that a significant fault is missed during the survey, that could have reasonably found by the surveyor, and it ends up costing a large sum of money, you can make a claim for the fall in the property price due to the undiscovered defects in the property.
If your claim is successful the indemnity insurers will pay out; whereas, if you had no survey and failed to spot a problem yourself, you'd only have yourself to blame (and no-one to claim against).
5. Surveyors have specialist knowledge about flats
Most flats and maisonettes in the UK are leasehold; this carries particular legal implications which your surveyor will know about.
- Maintenance responsibilities may arise, and a surveyor can make the right enquiries. If, for example, a flat has a lift, a surveyor would be quick to find out about its service history, which will alert you to the risk of paying huge sums should it break down after your purchase.
- With a flat, a solicitor will usually have a list of standard terms. Therefore if there are any quirks or design inconsistencies, your surveyor will detect them.
How much does a flat survey cost?
Our independent surveys start from £400 EXC VAT for a RICS level 2 survey or £500 EXC VAT if you need a RICS level 3 survey. Get a VAT-inclusive quote, which will be tailored to the size and condition of the property and includes VAT.
You can speak to one of our expert advisors at your standard network rate, from 9 am to 5.30 pm Monday to Friday, if you have any questions about the surveys we offer. Call 0333 344 3234 or request a free call back.
Do you have any particular concerns about the flat?
When you're buying a flat, you have a choice of house surveys. Level 2 was previously called a homebuyer report, and level 3 was known as a full structural survey. Generally, a level 2 basic survey is enough for a standard construction, purpose-built flat.
If you have particular concerns about older properties, potential structural issues affecting the flat or communal areas, roof space, or signs of building drainage issues in ground-floor gardens, speak with our experts, who can advise you for free, on whether a more comprehensive survey would be wise in your case.
Have you considered any property defects in relation to the freehold landlord or managing company?
If this is your first time buying a leasehold, you should know that the freeholder, sometimes via their managing agent or managing company, is responsible for ongoing maintenance on the building; such as roof repairs, external cladding, and all communal areas. If your flat is in reasonable condition but the overall property's condition is poor, this may indicate that the building isn't being managed effectively. This is a red flag for any prospective buyer.
Even cosmetic issues can cost the leaseholders a significant amount of money. The management company handles any maintenance and necessary repairs, but the cost is passed on to the leaseholders. Your surveyor will indicate any visible issues that could signify an upcoming cost under major works in your house survey report.
It is also worth noting that your surveyor can only inspect the roof area with clear and safe access, from a maximum height of three metres, so your seller may need the cooperation of the building manager to ensure your surveyor can take a proper look during the building survey.
It is especially important to check out the roof if you're a prospective buyer for the top-floor flat. You should check your lease terms to find out if the roof maintenance is a shared responsibility or if it will fall on you alone.
Do you need a Home Buyers Survey for your Leasehold Flat?
You can book a survey as soon as you get your offer accepted. We have local RICS surveyors throughout England with early booking slots at competitive prices. If you have any questions about these points, or would like to book a survey, please call us on 0333 344 3234.
RICS Surveyors – Leasehold Survey Specialists – Same Week Availability
Caragh is an excellent writer in her own right as well as an accomplished copy editor for both fiction and non-fiction books, news articles and editorials. She has written extensively for SAM for a variety of conveyancing, survey and mortgage related articles.
