Mortgage survey blackmail - is there an alternative?

[alison]

I’m thinking seriously about buying a Cotswold stone cottage, c. 1700, and having lurked about here in time-honoured fashion listening to you all, I have grasped the importance of having a proper conservation survey done as well as the one that will be demanded for the mortgage, plus the relative weight that I should be attaching to the surveyors’ ‘expert’ pronouncements.

The place is is pretty decent fettle, all things considered, but what I haven’t worked out is what I do in the event that I have the mortgage company surveyor on one shoulder saying ‘You’re only getting the money on condition that you install a DPC’ (or whatever daftness it might be), whereas in my other ear the conservation surveyor is giving a quite different analysis.

As far as I can see, it’s the irresistible force of me refusing to go against a conservation professional’s advice versus the immovable object of the mortgage company refusing to cough up the dosh unless I do.

Any ideas on creative strategies for handling this dilemma gratefully received.

 

[andrew gayton]

Easy; get your friendly conservation officer / historic buildings officer to write to the mortgage company to ensure that such a condition/retention is dropped. In my experience, the mortgage company will take the advice and drop the matter......

 

[middi]

Alison, thinking ahead when buying a cosy period property is the correct approach. Forget the B.S. attitude towards damp or other problems for the moment as you will only worry yourself by creating a problem which may or may not exist, If there is a genuine problem with damp or any other part of the structure YOU will want to now before anybodyelse.

You can only cross that bridge when you are confronted by it, in the meantime if you are serious enough to buy, also engage the services of a conservation architect/surveyor to evaluate any genuine defects with the property. It may save you a lot more money in the long run.

 

[Nemesis]

In all probability the surveyor will hedge bets and state you need a 'specialist' damp and timber survey. So hire a firm which isn't going to suggest a DPC is what is required plus spraying every timber with chemicals.

That's the survey you send to the mortgage company.

 

[andrew gayton]

although the mortgage company will want you to use the surveyor they use............

 

[Nemesis]

Initially... but that one will ask for a specialist damp and timber survey, to guard backs, so hire someone who isn't a man with a van and a damp meter...

Also - insist the mortgage company surveyor has historic buildings expertise...

 

[andrew gayton]

or simply get a letter from the l.p.a c.o/h.b.o.... much cheaper!

 

[Nemesis]

Well, best surely to take initial steps to avoid the mortgage company deciding that there is trouble brewing and insisting that there is a retention and damaging works?

Not all local authorities have a friendly CO or HBO either, and unless the building is listed the CO may not be keen to get involved.

 

[andrew gayton]

but they will always use thier own surveyor when deciding on whether to offer the mortgage or not..... in my experience this cannot be avoided, as they need to be sure of the 'investment'..... catch 22. so, either a friendly hbo/co or sensible surveyor will need to be lined up ready to counter the enevitable 'argument'

i just wish that the rics would change the format of the 'valuation' etc survey sheet/s

 

[Nemesis]

I think a major stumbling block though is the requirement for a further damp and timber survey. At this point it's usually up to the purchaser to find a firm, although many surveyors/mortgage comapnies/esatate agents will recommend one... usually one who comes free in the short term..

At that stage I think it's wise to insist on using a firm with genuine historic buildings expertise.

 

[andrew gayton]

agreed..............

 

[andrew gayton]

............ although in certain instances, remedial works - to undo modern works which have caused the damp - could/would easily end up costing more than the 'quick-fix' dpc/waterproof plastering etc...........

 

[Nemesis]

Well, in short term financial considerations yes, but in the longer term it's going round in circles of quick fix solutions which in the end cause more damage.

What needs changing is the whole survey and mortgage company mindset, but that's not easy!

 

[andrew gayton]

correct! - mortgage companies need to see the wider picture as opposed to the immediate financial implications. so shortsighted, all involved should be striving to seek the same. a complete revision would be the best way forward..............

 

[MdB]

With Mortgage companies their thoughts generally boil down to two questions: Will they make money from you? What is the risk that they will lose money?

Most people buying a period property will have a good size deposit, say 25% or more. This tells the Mortgage company that the risk of them losing money will be small as the likelyhood of the property value dropping more then 25% is small. If you are lucky enough to have a 50% deposit or greater than the risk to the mortgage company is tiny and they should be falling all over you trying to get your business.

If the mortgage company starts asking for silly things and you have a large deposit make sure that you let them know that you will go elsewhere if they won't be reasonable. They are your supplier, they work for you. Don't let them act as if they are doing you a favour. It is the other way around.

When I arranged the survey on my house, I got quotes from the two companies (chains) that the mortgage company suggested and a third quote from a local company that a friend recommended. The local company was half the price of the other quotes for the same type of survey and I was able to talk to the surveyor before hand to tell him what to concentrate his survey on (i.e. there was no point in looking at the sheds as I planned to get rid of them). This conversation turned out to be very useful as he invited me to join him at the end of the survey to discuss the points he had found. Yes he used an electrical meter to test for damp but he also pointed out that this wasn't necessarily a reliable test but other indicators showed that there was damp in a few places. Finally, the mortgage company had no problem with using him for the survey so you don't have to use who they say.

 

[Becka]

could your conservation surveyor not also do the valuation survey? when i bought my place the surveyor asked who my mortgage was due to be with and said no problem he could do the valuation survey too (this also saved me some cash as he did it at the same time) my guy wasn't a conservation surveyor (it was before i found this website) but presumably if the guy you choose its recognised by your bank then they can't have any complaint and he wouldn't advise anything stupid..

 

[Juju]

I panicked recently when the mortgage co. valuation was done on the house we're buying as it said the house was extremely damp, blah blah and they valued it at a couple of grand less than what we're paying, saying it would be worth that when we'd sorted out damp, etc. Complete contrast to the surveyor who did the structural survey and said yes a bit of damp but consistent with age of building and lots of other helpful, sensible remarks on dealing with it.

Anyway, luckily our mortgage co. never queried anything and all was agreed but as others have said, it might be a different story if you're borrowing say 90% or more (we're borrowing 60%). The strangest thing on the valuation survey was that s/he said the extension at the back was circa 1950. Actually it's probably more like 1750!

 

[Stephen]

The mortgage company will want to use a surveyor from their list of 'approved' surveyors. It is rare for independant surveyors (i.e. one not associated with the 'big boys') to be approved, but it can happen and some lenders are more flexible in who they use. However many building surveyors specialising in historic building surveys will not have insurance to cover them for valuations and therefore could not do the mortgage valuation anyway. My personal view is that it is best to keep the two things separate.

My advice to clients is usually to get the mortgage done first by whoever the mortgage company want to use. See what they have to say. When the building surveyor goes in to do the 'proper' survey you can ask him/her to specifically check any issues the mortgage valuation throws up. I would ask that the job should specifically include a letter to the mortgage company dealing with the points their valuer has raised.

As Andrew suggests, you could get the CO to support youwith a letter, although many are too busy and I suspect you would be waiting a while.

Dealing with conditions/retentions is the main issue.

Conditions are fairly easy because you agree to them and then basically do whatever you, the CO and/or your private surveyor think best for the building. If ever the mortgage company check up on the condition you simply explain that in the process of dealing with the works you were advised on a more suitable approach than that required by the original mortgage valuer. Here I am thinking specifically of a mortgage condition that requires timber and/or damp treatment with a gurantee and yet the actual work necessary is straightforward building work (e.g. lowering ground levels and opening up air bricks) for which no guarantee would normally be forthcoming.

Retentions are not so easy, because they are holding back some money. It is with retentions that letters from the CO and your private surveyor come into their own. If they still refuse to see sense for unreasonable or inappropriate retentions your only recourse is to threaten to take your business eslewhere.

On the matter of 'free surveys' the high street bods have grown wise to this and are now charging, but still giving the same advice!

On the matter of private surveys, most independant surveyors will tailor the report to suit your purposes and most (such as ourselves) will invite clients along at the end to chat through their findings on site, or will do so if you ask them. Fees vary considerably and are more likely to be based on the nature and size of the property than the value. Expect to pay anything upwards of £800 + VAT for a decent building survey. If you choose to get a private surveyor to deal with only specific issues expect to pay an hourly rate and this could be anything upward of £80 + VAT per hour.

Hope this helps.

 

[biffvernon]

Expect to pay anything upwards of £800 + VAT for a decent building survey. If you choose to get a private surveyor to deal with only specific issues expect to pay an hourly rate and this could be anything upward of £80 + VAT per hour.

Funny how for actually doing a job you only get a quarter of what the bloke who just looks at it gets

 

[Gervase]

A quarter?! Blimey, they must be made of money in Lincolnshire :wink: