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If you are insuring a building, you must indeed insure it for the cost of rebuilding it in its present form (i.e. reinstatement). If you’re seeking a mortgage for such a property or if it’s in need of insurance for any other reason, then in most cases, a valuation for rebuilding purposes will be required.
In essence, this process assesses how much it would cost to rebuild the structure to the same standard it was at before any damage occurred, using contemporary methods and materials. The insurance company provides indemnity on this basis.
For the insurance reinstatement valuation to be accurate, it should be undertaken by a professional who is a member of the Royal Institution of Chartered Surveyors (RICS). Valuations must use the Building Cost Information Service (BCIS) tables.
The reinstatement valuation has to be based on what it would cost to repair or replace the property in question. This cost must take into account a number of different factors such as:
Every three years—and after any major property changes—a total reinstatement cost evaluation should be done. This ensures that the property is insured to its appropriate level. If you have just purchased a home, you will find a reinstatement cost figure on your mortgage valuation. These figures should be reviewed to make sure they have not become outdated.
Determining the rebuild cost and the market value of your home are two separate and independent calculations, but they’re often confused.
The market value is based on how much someone would buy the property for. So, this will take into account size, desirability and location of your property (e.g. the quality of your local school district, employment opportunities, etc.) for setting the market value of a property.
The cost to reinstate is concerned only with the total rebuild cost of the whole structure in the event of its total loss and with returning the structure to the condition it was in just before the loss.
To secure proper insurance coverage and pay appropriate insurance premiums, you will need a professional Chartered Surveyor to perform an insurance reinstatement valuation. To help you set this up, we can put you in touch with our panel of valuers in Notting Hill.
Even if shared ownership’s other perceived advantages make it an attractive option, its valuations aren’t without problems. One of these problems is that shared ownership properties are usually at a discount to the market price, and that discount isn’t always applied consistently or fairly.
Failure to achieve a fair and consistent discount price can create a situation that, in the long run, is disincentivizing to shared ownership because the avenue becomes less affordable.
Another matter is shared ownership’s special nature. This model is a partnership-type arrangement between the resident and the housing association, so it is bound to have its share of disagreements, especially over property valuation. Now, the housing association is likely to want the property it has shared ownership in to be valued as highly as possible, since that would maximize its return in the event of resale or staircase. You, on the other hand, might prefer as low a valuation as possible, since that would minimize your financial outlay.
Furthermore, shared ownership trusts might not increase in value at the same rate as those on the open market, due to resale and buyer eligibility caps, an important consideration for shared owners looking to cash in on property market growth.
If you plan to purchase a larger portion of your shared ownership home, you will need an accurate valuation from an RICS-accredited surveyor. The valuation is valid for 3 months. So, reach out to us and a member of the Notting Hill Valuation Surveyor team will conduct a Shared Ownership Valuation for you.
The Full Building Survey report includes the following:
When it comes to the detail that the surveyor will go into concerning defects, repairs, and maintenance, the Homebuyer Survey is fairly standard. Full Building Surveys, however, are more refined and go into more detail about possible and likely defects. Repairs and maintenance are covered in more detail. The Survey cost depends on the age, size, and value of the property.
The analysis they undertake is a visual inspection. This means that, for the most part, the building components that can be seen will be looked at and assessed in accordance with the surveyor’s remit. The Home Survey Report will show you the visible defects and then go on to discuss the kinds of partially hidden or totally hidden defects that the surveyor thinks you should be aware of. It will also try to clarify what kinds of repair work need to be done and the nature of the repairs. The survey is effectively a way to consider “defects” and their potential impact on the building.
A Building Survey Report contains the most important information for understanding the condition of a property. The surveyors that undertake the work follow a set procedure. The first part of the report contains a general overview of the property and its surroundings. The second part details the major and minor problems with the property’s components, inside and out. These problems range from serious structural defects to issues with doors or windows that don’t close properly, and everything in between. The report is written in clear English, complemented by diagrams and photographs. If any of the problems found are what a surveyor might consider important, that’s what the report indicates—using clear and unambiguous language.
Surveyors usually use a tick box to indicate methods of repair when drafting a building survey report. They are also required to comment on the timescale of any repairs. A condition rating is typically included: what needs to be addressed immediately, what is in the process of deteriorating but is in reasonable condition, and what has not deteriorated at all.
A building surveyor is responsible for a variety of checks and tests during a building inspection. These could be checks or tests for damp and woodworm, or they could be visual inspections of the building’s structure. In building surveying, there are visual inspections of roofs – checking for tiles and slates (if applicable) and also checking for leadwork (if applicable) and looking at the junctions between roof and wall. If the wall structure has brick in it, the surveyor will visually check for any “spalling” (brick breaking apart visibly) and any bulging (brick failing to hold its place visibly), for example.
If defects need fixing immediately, then the options recommended for this survey specify what to repair and give some idea of how long the problem has existed. For the most part, this survey describes recommended repair approaches that are standard in the industry and that do not require excessive expenditure. Future maintenance is also discussed, including what to expect when the problem being surveyed is not repaired and what to expect with repairs that are made but with questionable methodology.
Your surveyor will explain some of the legal aspects of purchasing the building, covering—in as much or as little detail as you desire, and their implications, but this is subject to your solicitor verifying.
You might consider having a separate market valuation done to determine whether the property’s asking price is warranted. You’ll also need a reinstatement cost valuation for insurance reasons.
RICS’s industry guidelines suggest building surveys for properties that are large, very old, in some disrepair, or have unusual features. Building surveys are also recommended if you plan to do any significant renovations or extensions.
If you’re purchasing a relatively modern home that’s in decent shape and built to ordinary standards, then a Home Buyer Survey is an acceptable choice. If you want the assurance of an inspection and report that are pretty much guaranteed to turn up any issues that might be hidden or just hard to see, then you should go for a Full Building Survey instead.
The Full Building Survey is more detailed; it is more specifically tailored to the property your surveyor would be inspecting. It also comes with more advice on the visible defects found and on the potential hidden defects that they suspect may be present. Your surveyor will illustrate reports with photographs so that you can clearly see what has been discovered. Both the Home Buyer and Full Building Surveys describe the repairs needed, the order in which the repairs should be done, and the kind of “maintenance measures” that will be required to keep the property in good condition.
A HomeBuyer Report does include a market valuation as well as reinstatement costs. However, a Full Building Survey does not. The main reason for the differences in what is and isn’t included in the two types of reports is how focused the reports are on the condition of the property. The Full Building Survey is the most in-depth and comprehensive survey of a property that you can have done.
When it comes to valuing assets for the Charities Act 2011, appointing the correct surveyor is critical for compliance. There are three key facets to ensuring that a surveyor is appropriate:
Looking for a Chartered Surveyor? If you are buying a property, contact us for a building survey. Our panel of CIOB, RPSA and RICS surveyors will help you with the Level 2 or Level 3 property survey you need in Notting Hill. We can also assist you in Red Book Valuations, Party Wall Awards and other services. Reach out to us today for building surveyors, valuers and party wall surveyors in London!
