Like most buyers on the common market, you would rely on you lenders property valuation. But what if this was the beginning of a nightmare?
Mr and Mrs Coville-Wright fell in love with a property, bought it, moved in and then found a fundamental issue. Back in 2013, they bought a £500,000 barn conversion in Somerset which had a cottage with an annexe and a separate block of bed and breakfast rooms.
They relied only on their lenders property valuation and did not get their own building survey completed. The valuation costs £650 and was paid for by the couple, and a 28-page document confirmed that the property was worth the asking price.
Their property valuation document stated that the conversion had “several minor areas of disrepair”, the annexe was in “reasonable repair” and the Bed and Breakfast rooms were “in a good state of repair with no outstanding items of material disrepair”.
But instantly they found otherwise. “On our first night we encountered the problem of kitchen drawers sliding open by themselves”. There were warning signs everywhere, with their 5 year old son not being able to play with marbles or ball inside as they rolled away.
The couple then decided to commission another survey which looked into fixing the problems. Symonds & Sampson noted serious defects, most “apparent from just a visual examination”, including subsidence in all of the property, “in particular the B&B building”. Other issues included a “bowed roof structure”, “external cracking” in walls and bricks, missing mortar, shoddy tiling, walls “clearly out of plumb”, missing bricks and internal cracking “which corresponds with cracking outside”.
The price tag for repairs was estimated at £165,000. The report stated “any competent valuer should have noted the defects which we believe would have been apparent at the time of their inspection.”
The couple soon discovered that they could not lay the blame with Carter Jonas as the valuation was undertaken for NatWest. This is the normal procedure with valuations, the borrowers often pay for them and are shown them by the lender, but legally they are undertaken by the lender only.
There is usually a clause which say something similar to “The valuer accepts no responsibility whatsoever to any parties other than the client. Any such parties rely on the report at their own risk.”
The couple pursued NatWest for an answer. NatWest refused to help as they pointed out to the couple that it had lost no money. The Financial Ombudsman, while sympathetic, said it could not intervene because NatWest had not caused the couple any loss.
This Case Study helps to highlight the confusion caused when lenders reference “free valuations” as a service provided to borrowers. It is easy for consumers to be challenged by what is included, but the main things to stress is the importance of commissioning your own surveys. This includes reports such as ‘homebuyers report’, ‘condition report’ all the way through to a full property survey.
If you are looking at purchasing a property soon, make sure you speak with a qualified property Surveyor for profession advice on what surveys are needed. Read our First Time Buyers blog for what you need to know.