The home buyer's report clashes with mortgage valuation survey - which is right?
Zoe W from Rhyl
15 August 2017
Surveying Advice questions and answers
I am in the process of buying a terraced house. It has horizontal cracks along the ceiling of one wall. I was told the house next door has historical movement on their survey. The mortgage valuation surveyor said 'historical cracks, non-progressive', but the home buyers report has said 'evidence of underpinning and needs building survey'. My mortgage offer has been withdrawn until a building survey has been done. The current owners said there was no underpinning and that they have never had problem with insurance. The mortgage adviser is unsure if I get the building survey done whether the mortgage offer would still be withdrawn or not. She said there is a 50/50 chance. Do I pay for the building survey and hope the home buyer's report is wrong? Would underpinning stop the bank from offering a mortgage?
Even though your mortgage valuation surveyor has not identified a serious problem, you have quite rightly opted for a more detailed, “Level 2” survey and this has highlighted a potential structural problem. It is important that this is investigated, not just because of the subsequent withdrawal of the mortgage offer, but also because you will need to seriously consider whether you should be buying a house with serious structural problems. The most appropriate next step for investigation would be to engage a structural engineer.
However, it is not always possible to determine whether structural movement is ongoing from only one visit to a building – sometimes the situation has to be monitored over a period of months. In situations such as this, my advice to a client would be that they ask the seller to undertake the further investigation – after all, it is their house and if a sale cannot proceed until the outcome is known, their problem. As a potential buyer, you run the risk of spending several hundred pounds more, with no guarantee of a successful outcome.
If a structural problem is identified, it is likely that the sellers would need to make a claim under their insurance. This could have a serious effect on the availability of a mortgage offer as most lenders (and their underwriters) will not be keen on taking on a pre-existing problem. Also, I think you should question seriously whether you would want to take on that problem, particularly as you would need to disclose it to a subsequent buyer, should you decide to sell. It could also seriously reduce your own options for obtaining insurance in the future. Sadly, there are times in the property buying process when it is better to simply move on….”