What happens after your offer has been accepted?

The home buying journey is usually travelled along a long and winding road. One of the key milestones in your search for your next property is to find one that meets your needs, make an offer and have it accepted. It’s a huge relief to have completed this step but don’t be in a hurry to mentally move in just yet. There are lots of things that need to happen before you get the keys to your new home. Below is a summary of the process that gets triggered once the sale has been agreed with the seller and the steps you now need to take.

1 – Ask the seller to cease marketing

The first thing you need to do is to ask the seller (or their estate agent) to take the property off the market and cancel any outstanding viewings. Make your offer conditional upon this happening straightaway. Estate agents have a legal duty to inform the seller of all offers made. As far as possible, you want to eliminate the possibility of anyone else making a higher offer and risk being gazumped.

2 – Contact your conveyancer

One of the first things that you will need to supply to the estate agent is the details of your property solicitor or licensed conveyancer who will act on your behalf to liaise with the seller and process the transfer of ownership through exchanging contracts and ultimately completing the sale. In order to avoid any delays, it’s a good idea to have done your research well in advance, obtained conveyancing quotes and chosen a good local solicitor, and put them on standby. Once your offer to buy has been accepted, contact your conveyancer and with the details of the property in question and let them know that they will shortly be hearing from the other side.

3 – Contact your lender

Estate agents typically require buyers to have a mortgage agreement in principle before they are willing to accept your offer. That said, an in-principle decision is not the same as an approved loan. Once you have secured the property, contact your mortgage company straight away with the details of the property in question. The lender will need to carry out their own mortgage valuation to ensure the property is worth the price you’ve agreed to pay before they can approve the mortgage. Whether you’re a first-time buyer or already have a mortgage on a property you’re selling, it’s vital to have a good channel of communication with the lender and obtain clear advice to ensure you are meeting all the criteria.

4 – Book a survey

The lender will conduct a mortgage valuation for the property, but this is for their own benefit, not for yours. Only an independent survey carried out by a RICS surveyor will give you an honest professional view of the property’s true condition. This is your opportunity to do your own due diligence, making sure that the asset constitutes a good investment. At Able Surveyors, we can advise on the right choice of survey for your needs and provide you with a competitive quote. Our experienced surveyors are experts in the field, able to spot potentially serious building defects such as damp, timber decay and subsidence. There are many issues that the untrained eye may not recognise but that could have a material impact on the price you’re willing to pay, or your desire to purchase at all.

5 – Work towards exchanging contracts

Your solicitor will start preparing the draft contract as soon as they have been instructed. This will include key information including the agreed price, the level of deposit, dates for exchange and completion, and which fixtures and fittings are included – all of which have to be agreed with the other side. This process takes time, and delays and problems can arise, which make this one of the most stressful stages in the house buying process. What’s more, your conveyancer will need to complete a range of important checks and searches including local authority searches, environmental searches, title searches and more. These can also take time to be completed, and potentially throw up unexpected issues.

6 – Exchange of contracts

Once all legal steps and checks have been completed, pre-contract enquiries answered to everyone’s satisfaction and outstanding issues resolved for both parties, the solicitors will indicate that they are ready to exchange contracts. This is the point at which the deposit is paid and the transaction becomes legally binding. At any point before contracts are exchanged, you or the seller have the option to have a change of heart and withdraw from the deal. It can be hugely frustrating when a seller suddenly pulls out leaving you without a property to buy. Conversely, it can also be a relief to be able to step away from buying a property when ‘dealbreaker’ problems are discovered.

7 – Completion

When contracts are exchanged, the date of completion will have been fixed, so you now know when you will be able to move. The countdown has begun! Make sure that you have a removal company lined up for the date you wish to move, and are ready to start packing. On the day of completion, the outstanding funds will be transferred to the seller’s client account and you will be able to collect the keys to your new home. Any mortgage account fees, legal fees and Stamp Duty will now also become payable. Finally, your conveyancer will register the transfer of ownership with the Land Registry.

Get in touch

At Able Surveyors, our experienced team of RICS Chartered Surveyors has been serving property buyers in London and Essex for over 25 years. If you are looking for valuable impartial advice at competitive rates, we would be delighted to help. Contact our friendly team to discuss your next home purchase today.

All you need to know about Japanese knotweed

If you are in the process of buying a house, you will no doubt want to be reassured that your purchase is a good investment. Most buyers take a keen interest to find out more about the condition of the building before going through with the transaction, and that’s where our independent property surveys can add real value. But what about the garden?

Were you aware that there may be dangers lurking in the garden that can have potentially serious structural impact on the building? If you haven’t heard of Japanese knotweed, now is the time to sit up and take notice. It could be bad news.

What is Japanese knotweed?

Japanese knotweed (Fallopia japonica) may look like a regular perennial weed but it is a highly invasive species that thrives pretty much anywhere and is virtually indestructible. It originates in Japan and was introduced to the UK in the mid-1800s as an ornamental garden plant. Unfortunately, unlike in its native habitat, knotweed has no natural enemy in this country.

Plants grow rapidly through the warmer months – up to 10cm per day – and die back in the wintertime, only to return with renewed vigour the following year. The speed of growth can cause problems with biodiversity, flood management and damage to property. Mature specimen are powerful enough to undermine man-made structures, able to push up through patios, tarmac and concrete, and through drains and cavity walls.

How do you spot it?

At Able Surveyors, our Chartered Surveyors know to look out for Japanese knotweed in gardens and outdoor spaces. Its pale green shield-shaped leaves on tall, hollow stems bear a resemblance to bamboo and can grow up to 3 metres high. When in bloom, there are clusters of small white flowers in upright formations.

While Japanese knotweed can be found in most places in the UK and will grow happily in any terrain and on any soil, it is perhaps Victorian properties that are most at risk. Houses built in the mid to late 19th century are most likely to be suffering from historic problems with this plant. UK maps and online plant trackers are also available to help you identify areas where knotweed may be a local problem.

In actual fact, finding Japanese knotweed in the garden shouldn’t come as surprise. There is a specific question on The Law Society’s TA6 Form which forms part of pre-contractual enquiries that the seller must answer. A false declaration means you could sue the seller under the Misrepresentation Act.

Why is Japanese knotweed a serious problem?

As you may have already gleaned from the information provided thus far, the presence of knotweed on the grounds (or anywhere in the vicinity) of a property you are thinking of buying constitutes a real risk that goes beyond the nuisance factor of having to deal with fast-growing shrubbery in the garden.

Knotweed can spread with great speed and resilience, damaging building structures in the process and exploiting any weak points that may already be present. From underground drains to paving, tarmac and retaining walls, even causing subsidence issues to the main foundations of the house, this plant takes no prisoners.

Will knotweed affect the property value?

Indeed, it shouldn’t come as surprise to hear that mortgage companies take a very dim view indeed when it comes to lending on knotweed-afflicted properties. Many won’t approve a loan on properties that show evidence of knotweed within 7 metres of the boundary. Of those who do, they will insist on a Knotweed Management Plan (KMP) being in place, which is a prerequisite for house buying and selling of knotweed-affected properties. According to Environment Agency regulations, once you find Japanese knotweed on a property, it is essential that you set up some form of KMP.

Needless to say, knotweed majorly affects the saleability of the property and impacts its value, both for your upcoming transaction and future sales. According to official figures, untreated knotweed infestations can reduce property value by 10%. What’s more, even if the plant has been treated and removed, the drop in value can still be as much as 6-9%.

If your Building Survey has flagged up Japanese knotweed, you must speak to the seller and their agent and at the very least review the previously agreed price.

How can you get rid of it?

Controlling Japanese knotweed is a difficult and expensive task that requires specialist contractors. Very few knotweed specialists currently offer a 100% removal guarantee. Where Japanese knotweed is considered to pose a risk to the property, it is usually necessary to agree to eradicate the plant by implementing a long-term Knotweed Management Plan to satisfy the requirements of the lender.

The removal of knotweed is generally carried out in 3 steps:

  1. Excavation – digging out all plants and the surrounding contaminated soil, and disposing of it as ‘controlled waste’ by licensed carriers to licensed landfill sites. It’s a laborious and costly exercise.
  2. Herbicide control – repeated application of herbicide to kill the plant gradually, including stem injections. It can take months and years to gain control.
  3. Physical barriers – inserted along the boundary to arrest and contain the spread of knotweed to another property.

What are your options as a buyer?

As a potential buyer, you may well decide not to proceed with the purchase and steer clear of any property affected by this invasive plant. However, the presence of knotweed need not be a dealbreaker as long as you go into the purchase with your eyes wide open and with a clear plan of action.

At Able Surveyors, we can help with a wide range of range of surveying services and Specific Defect Reports for properties across London and Essex. Contact the team to discuss any Japanese knotweed issues at the property you are thinking of buying and let us help you understand the potential implications and ramifications, so that you can make the best decision.

Do you need a survey for a new-build home?

RICS Property Valuations

The government is aiming to build 300,000 new homes per year to tackle the chronic under-supply of housing in the UK. With residential developments sprouting up throughout Greater London and beyond, there is now more choice than ever for homebuyers who are seeking the lifestyle offered by new-build properties.

Brand-new homes have a wealth of appeal. As the owner of a newly built property, you’ll be the first person benefitting from its pristine facilities, while repairs and maintenance costs should remain minimal in the first years of occupation. For your peace of mind, the housebuilder will provide a NHBC or similar warranty on the property, plus a snagging service to make sure the building’s condition is as it should be.

If you were buying a resale home, you would be commissioning a property survey for reassurance that there are no building defects or problems. But with a new-build home, there’s no need, right?

Well, not necessarily.

Here at Able Surveyors, we have 25+ years’ experience of residential and commercial property surveying in London and Essex. Our Chartered Surveyors deliver valuable professional insights to our clients, with independent property surveys that enable you to understand the condition of the building you are about to invest in. We would advise all homebuyers to get a home survey before purchase, regardless of whether you’re buying a brand-new or an older building.

Are you paying the right price?

It is no secret that many brand-new homes carry a ‘new build premium’, which effectively makes them more expensive to buy than comparable older properties. The sales appeal of a newly built home is simply so strong that higher prices can be commanded. While this allows developers to maximise profits, homebuyers may in fact be paying over the odds.

According to a recent report by Property Industry Eye, the average new build price premium in the UK is 29% (26% for England).

Paying a higher price could be a problem if your mortgage lender refuses to approve the loan. Even if you succeed in obtaining a mortgage (or can proceed without one), you may struggle to sell the property on in years to come without a loss.

At Able Surveyors, we carry out independent RICS Valuation Reports and RICS HomeBuyer Reports where we verify the market value of the property in question, potentially saving you a lot of time, money and heartache. What’s more, if the survey findings detect any issues with the building, you may even be able to request a reduction in the price.

Are there issues with the building?

Your new build may look perfect but without an independent inspection there’s just no way of knowing. New homes have been known to suffer from a wealth of unexpected problems, and housebuilders are not always forthcoming with prompt remedial action. Poor plastering, bad brickwork pointing and damaged windows among the most commonly reported ‘snags’.

With an investment decision that may well be the biggest you will ever make, can you afford to take the risk?

Fortunately, there are different types of property surveys available that can offer peace of mind, both in terms of the market value and the building’s physical state. Our RICS HomeBuyer Report is a mid-level investigation designed to flag up serious defects and urgent repairs including structural problems such as damp, timber decay and subsidence. For ease of use, a templated traffic light condition ratings system is used to indicate the severity of any issues detected.

Having an experienced Chartered Surveyor take an expert look at the property before you buy can protect you against unforeseen and potentially expensive repairs later on. Say the survey identifies an issue with the damp proof course – our advice will include recommendations for repair and maintenance. Cost estimates can be a useful bargain chip to motivate the developer to rectify the issue before exchange or discount the sale price accordingly.

Get in touch for expert advice

There is no doubt in our professional minds that an independent property survey is your best chance to obtain all the necessary facts about your prospective new home, enabling you to make the right decision.

Whether you are considering the purchase of a new-build in Brent, Bromley or Brentwood,  or anywhere in London or Essex, please feel free to contact the Able Surveyors team to discuss your new home purchase and your survey requirements. We’ll be delighted to talk you through all the options, recommend the best course of action and provide you with a free quote.

Why every first-time buyer should get an independent property survey

Getting onto the property ladder is a big achievement and an exciting time. However, in your search for the perfect first home, it is essential that you use your head to help you decide whether the property you are about to invest in is good value for money. The financial commitment of a mortgage is a huge long-term decision, so it needs to be the right one for you. And just as you wouldn’t buy a car without getting it checked over first, you shouldn’t buy your first flat or house without a survey.

At Able Surveyors, we have more than 25 years’ professional experience of residential properties in London and the Home Counties. Our independent property surveys are designed to uncover any building defects and potential issues that may not be obvious to the layperson. Without the benefit of a surveyor’s report, these could end up costing you thousands to fix after you move in.

What exactly is a home survey?

Able Surveyors are an independent firm of RICS accredited Chartered Surveyors helping our clients to get the most from their property purchases. As such, we offer the full suite of home surveys endorsed by the Royal Institution of Chartered Surveyors, our professional body:

RICS Property Valuations

RICS HomeBuyer Report (Level 2)

RICS Building Survey (Level 3)

While each of the above surveys has a different level of detail, they are all designed with the client at the core. The aim is to provide you with all the relevant factual information you need to make an intelligent decision about the property you are thinking of buying.

Whichever survey you choose, our surveyor will arrange for a site visit of the property in order to inspect the condition of both the interior and exterior of the building, looking for defects or signs of underlying issues. Our findings are then compiled into a user-friendly client report.

Which is the right survey for your needs?

As a first-time buyer with little property experience, you may need guidance to choose the right survey for your property purchase. The team at Able Surveyors would be more than happy to talk you through all the options and guide you in the right direction.

The RICS HomeBuyer Report (Level 2) is a mid-level building investigation, most suitable for conventional modern homes in reasonable condition. The most comprehensive level of reporting is provided through an RICS Building Survey (Level 3). This is the best choice for older buildings, non-standard constructions, larger properties and those that have been substantially altered or are in need of refurbishment. The report includes a detailed analysis of our findings for each building feature and also gives expert recommendations for repair and maintenance.

Is it really worth getting a survey for your first home?

If the flat or house you have your heart set on looks to be in good condition and the budget is already stretched, you may be tempted not to bother with a property survey. However, we think this would be a very risky decision to take.

Sadly, the issues that can easily go unnoticed by an untrained eye are often the most expensive problems to put right. This includes major structural issues, roof and guttering defects, persistent damp, wet and dry rot, faulty electrics and much more. An RICS home survey may cost a few hundred pounds but the potential savings can run into the thousands. The survey report will provide you with the facts you need to know to make an informed decision, be it to proceed with the purchase as planned, renegotiate the asking price, or walk away from the property.

Get in touch

If you’re about to buy your first home and are looking for friendly, professional advice from a reliable property surveyor in London, Essex or the Home Counties, please get in touch with Able Surveyors. We would be delighted to discuss your surveying needs and help you choose the most suitable home survey, putting you in the best possible position to make a confident decision about your very first home. Call us on 0207 164 6628 or obtain an instant quote here.

A brief summary about Permitted Development

If you are thinking of making home improvements to your property, the issue of planning permission may weigh heavily on your mind. But did you know that, in many cases, you won’t need to obtain planning consent? Under ‘permitted development rights’, homeowners are able to make certain alterations without the need to apply for planning permission. This may include loft extensions, garage conversions and home extensions.

At Able Surveyors, our team of experienced Chartered Surveyors provides a wide range of surveying services and property-related services to help our clients get the most from their property asset. Let’s take a deep dive into the subject of Permitted Development and find out what it’s all about, and how the provisions can make your life easier when it comes to upgrading your property.

What is Permitted Development?

According to the government website, “permitted development rights are a national grant of planning permission which allow certain building works and changes of use to be carried out without having to make a planning application”. For homeowners wanting to improve their dwelling, this can be of major benefit to anyone wanting to add value to their property or maximise the potential of a new property investment.

Permitted development rights apply to the building as it was built or, for older properties, as it stood on 1st July 1948. There is a limit to the number of alterations that can be made to a building under permitted development. If you purchase a property that has already been altered including any additions made by previous owners since 1948, it is possible that some or all of the property’s permitted development allocation may have already been used up.

Permitted development is regulated through local planning authorities, in the same way as planning consent. Before you start your build, you need to ensure that your plans are compliant and obtain written confirmation from your local planning officer that the proposed works are indeed classed as permitted development. Visit the Planning Portal to review the rules and ask your local planning authority for guidance, if you’re not sure.

What are you allowed to do under Permitted Development?

Permitted development rights for households fall into different categories, depending on the proposed improvements for internal or external works. Each category stipulates criteria that must be fulfilled for permitted development rights to apply, otherwise planning consent must be obtained. Here’s a list of home improvements that generally fall under permitted development rights:

  • Erection of front porch
  • Garage conversion
  • Side extension
  • Rear building extension
  • Loft conversion
  • Installation of rooflights and dormer windows
  • Internal alterations to the building
  • External solar roof panel installation
  • Erection of antennae and satellite dishes

What are you NOT allowed to do under Permitted Development?

If your building plans involve a new-build house or the formation of new dwellings by subdividing an existing property, permitted development rights are unlikely to apply. The list below includes other types of work that also fall outside the scope of permitted development:

  • Building a front extension
  • Verandas and balconies
  • Raised platforms
  • Extensions that are larger than half of the original land around the original house
  • Extensions that are in excess of 4 metres high or larger than half the width of the original house

It is important to note that permitted development rights do not apply to leasehold properties, including flats and maisonettes, nor to listed buildings.

Can Permitted Development rights be withdrawn?

It would be unwise to assume that permitted development rights will always apply, since it is possible for permitted development rights to be restricted or withdrawn. As already mentioned above, leasehold properties do not have any permitted development rights. Check the lease to see what alterations are permitted and obtain the landlord’s written consent for any alterations you wish to make. For structural alterations to a flat or maisonette, you will also need to obtain planning consent.

If your house already is already affected by planning restrictions, for example if it is located in a Conservation Area, an AONB, National Park or World Heritage Site, there may be an Article 4 Direction in place to remove or restrict your permitted development rights. In this case, priority is given to the preservation of the specific character of the local area. The same applies if the property in question is a listed building, requiring Listed Building Consent or improvements or alterations to any of the ‘listed’ architectural features.

What to do next?

If you wish to carry out home improvements or structural alterations to your property, your first port of call should be the Planning Portal and your local planning authority. Here you will find useful guidance and obtain written confirmation that your building project falls under permitted development. If the proposed works fall outside the scope for permitted development for whatever reason, planning consent will have to be sought.

Improving your property to make it more comfortable to live in while adding value is high on the agenda for many homebuyers and owners. For professional advice and guidance regarding your permitted development rights and any planning issues you could be facing, contact Able Surveyors for an initial consultation.

How to protect your property purchase from gazumping

If you are in the process of buying your next home, you know how long and arduous the journey can be. Once your offer price has been accepted and solicitors have been instructed, there’s still plenty that can go wrong before contracts are exchanged – and that includes gazumping.

Research carried out by finance provider MFS in 2020 showed that 31% of UK homebuyers (47% in London) over the last 10 years had experienced gazumping and lost out on a home purchase as a result, and the trend is set to continue as the market grows.

Let’s take a closer look at the dreaded practice and how you can protect yourself.

What is gazumping?

Gazumping happens when another buyer makes a higher offer for the property on which you have agreed the purchase. If the seller accepts the higher offer, you lose the property and any money already spent on it, which could include legal, surveyor and mortgage fees.

Reasons for gazumping can vary. Perhaps the seller has realised they can get a better sale price elsewhere, or you are taking too long to commission a home survey thus denting your credibility as a buyer, or perhaps your solicitor is slow to communicate and the seller has found a buyer who can move more quickly.

Is gazumping legal?

While gazumping may well be considered sharp practice, it is indeed perfectly legal. When your offer is accepted, the property is ‘sold subject to contract’ (SSTC). The property transaction does not become legally binding until contracts have been exchanged. As a buyer, you are vulnerable to gazumping at any time before that date.

Since exchanging contracts comes fairly late in the home buying process, and only takes place after the mortgage has been agreed, survey findings have been digested and local searches have been carried out, gazumping can be both hugely frustrating as well as financially painful.

How can you guard against gazumping?

Estate agents have a legal duty to pass on any offer they receive, so the first and most important thing you must do is to get the property taken off the market. Make it a condition of your offer that all marketing and advertising of the property ceases with immediate effect. If no-one else views the property, chances of a higher offer being made and you being gazumped are greatly reduced.

Once an offer has been accepted, it is assumed that both parties want to get on with the conveyancing process as soon as is reasonably possible. As a buyer, it is therefore in your best interest to be prepared and ready to proceed. This means having a mortgage in principle in place, a solicitor on stand-by ready to start the conveyancing, and all the necessary documents at your fingertips to avoid any unnecessary delays that could have the potential to derail the sale.

Appointing a surveyor and arranging for an inspection visit is usually the next step in the process. As RICS accredited Chartered Surveyors offering the full range of RICS endorsed home surveys, Able Surveyors are ideally placed to help you get the insights you need so you can make an informed purchase decision. Our surveyors are knowledgeable and highly experienced in property markets in London and Essex. Contact us here to arrange for a free no-obligation quote. London homebuyers can obtain an instant online quote here.

Keep the momentum going and do whatever you can to move the process towards exchange of contracts swiftly. You want to get contracts exchanged as soon as possible to have the legal certainty that your purchase is going ahead. Make sure that you are in regular contact with your mortgage provider and your conveyancing solicitor so that requests for information can be responded to quickly. Also, keep the estate agent in the loop; it’s in their interest to keep up the pressure on the seller.

It’s also worth building up a rapport with the seller. While the formal sale will be in the hands of the solicitors, and the estate agent serves as a go-between, there’s no harm in having a direct line of communication to the seller. That way, you can keep them informed of where you are in the conveyancing process and show that you are actively moving things along. If you get on well and they can see that you are a serious buyer who genuinely loves their home, they will feel more inclined to honour the deal in hand.

Finally, did you know that you can get home buyer protection insurance to protect yourself against a house sale falling through? While there may be nothing much you can do about a seller changing his mind or accepting another offer, at least you can mitigate the financial loss by claiming back some of your conveyancing fees, survey fees or any other expenses incurred on an abortive sale.

At Able Surveyors, we have over 25 years’ experience in helping home buyers in London, Essex and the Home Counties get the most out of their property purchase, and we would be delighted to do the same for you. For further information please get in touch.

What are the pros and cons of an informal lease extension?

If you are the owner of a leasehold property and the number of years remaining on the lease is approaching 90 years, you may want to think about a lease extension. Under the provisions of the Leasehold Reform, Housing and Urban Development Act 1993 (the Act), residential leaseholders have a statutory right to extend their lease. However, the process is often long-winded and potentially expensive, so it should come as no surprise that many leaseholders are eager to explore alternative routes.

At Able Surveyors, we have over 25 years’ experience in all aspects of building surveying and associated property services. Our team offers valuable professional advice including lease extension surveys and valuations and can help you increase the value of your leasehold asset. As trusted building surveyors in London and Essex, please feel free to discuss your property with us.

What are the differences between a formal and informal lease extension?

Briefly, a formal lease extension follows the statutory process set out under the Act. This must be initiated by the leaseholder serving a Section 42 Notice on the freeholder, and putting in an offer to extend the lease by 90 years with no future ground rent. The offer will be based on a professional leasehold valuation carried out by a surveyor, while negotiations will involve lawyers for both parties. After much to-ing and fro-ing, an agreement is eventually reached on the premium to be paid. Visit our recent blog for more information about statutory lease extensions.

The advantages for leaseholders taking the statutory route include:

  • You will receive a guaranteed lease extension of 90 years which will be added to the number of years currently remaining.
  • The term remaining on the lease is ‘frozen’ once formal proceedings have started, so there is no danger of the premium increasing as the term decreases.
  • Once you lease is extended, your future ground rent obligations will be reduced to zero.
  • The premium payable for your lease extension is usually better value for money than can be achieved by informal agreement with the landlord.

Informal lease extensions don’t need to follow the same process. A leaseholder will normally approach the landlord in writing with a request for a lease extension on terms to be agreed. These terms can differ widely: the number of years added to the lease will typically be less than the statutory 90 years, and ground rent clauses will remain or may even increase. The advantages of choosing an informal route include:

  • To qualify for a statutory lease extension, you must have owned the property for at least 2 years. No such eligibility criteria apply for informal lease extensions.
  • The cost of serving a Section 42 Notice is around £220, which constitutes a small cost saving if you conclude an informal agreement instead.
  • There is tremendous scope for flexibility in negotiations. If, for instance, the premium is unaffordable, a lower additional term and keeping the ground rent in place could be a palatable alternative solution.

Are there any disadvantages of extending your lease informally?

The main issue with an informal lease extension is that these private agreements, though perfectly valid in law, are not bound by the provisions of the 1993 Act, meaning that all of the terms of the new lease may be open for renegotiation.

This creates a situation that could be exploited by unscrupulous freeholders, particularly if the leaseholder has insufficient access to professional advice. It is sadly not uncommon for landlords to take advantage of the power imbalance, with many lease extensions negotiated on the basis of a shorter extension and with some ground rent retained.

When approaching a freeholder on an informal basis, you should expect a request for payment to cover the landlord’s administrative and valuation costs. It is also likely that the freeholder’s offered premium will be significantly inflated, compared to the amount calculated as part of the statutory process. This can leave the leaseholder with little option but to accept the landlord’s onerous terms, or break off negotiations and commence the formal route from scratch.

Which is the best route to take?

While both lease extension routes have their pros and cons, the advice on which is more suitable really depends on your individual situation. If you have owned the property for two or more years, it makes sense to commence matters through the formal route, with the benefit of the full protection offered through statutory process.

We strongly recommend that you always instruct a professional surveyor to carry out a lease extension valuation and serve the Notice on your behalf. Even if you start going down the formal route, there is nothing to stop you from reaching an informal agreement at any stage of the process – effectively giving you the best of both worlds.

If, however, you have not owned the property for the required two years, and the remaining lease term is less than 82 years, it may make more sense to approach the freeholder informally to negotiate a quick deal.

Contact Able Surveyors – London and Essex

For any questions regarding lease extensions in London, or to discuss your particular property needs in Battersea, Bromley, Brentwood and beyond, please feel free to contact the Able Surveyors team.

5 questions answered about statutory lease extensions

statutory lease extensions

Do you own a leasehold property, typically a flat or maisonette? The number of years left to run on the lease are a key component of the property’s market value, and there may come a time when a lease extension would make sense. So, what can you do?

Many leaseholders are unaware that they have a legal right to extend the lease on their property. Should you decide to approach the freeholder or the management agent direct with a request for a lease extension, chances are that they may offer you a restored 99-year term and revised ground rent clauses in return for a non-negotiable premium to be paid. But don’t be in a hurry to accept their terms because you may be able to do better.

If you have owned the property for more than two years and meet certain other eligibility criteria, you have the right to a statutory lease extension under the terms of the 1993 Leasehold Reform Housing & Urban Development Act. What does it all mean? Let’s take a look at some of the key questions you should be asking.

  1. Why would you want to extend the lease term?

By default, leasehold property is a depreciating asset. As the lease runs down, the value of the property decreases, while the cost of any lease extension increases. Ultimately, when the lease term expires, property ownership reverts back to the freeholder, though this rarely happens in practice.

An unexpired term of 80 years or less is considered by many to be unacceptable, since it makes the property hard to mortgage, remortgage or sell on. Mortgage companies have specific lending criteria and many simply refuse to provide the funds for a property of less than 70 years or so to run (exact figures vary between lenders).

  1. What does a statutory lease extension achieve?

A statutory lease extension provides a 90-year extension on top of the existing unexpired lease term. Say your lease has 74 years remaining, a statutory lease extension will give you a new term of 164 years. In addition, ground rent will be reduced to zero for the duration of the lease, while the premium payable to the freeholder is determined by Schedule 13 of the Act.

Finally, if you extend your lease before the unexpired term has reached 80 years, no marriage value (50% of the difference in value before and after the lease extension) is payable as part of the premium, thus further reducing the amount due to the freeholder.

  1. Are you eligible for a statutory lease extension?

In order to qualify for a statutory lease extension, you must have owned the property for at least 2 years, while the lease term must have been more than 21 years when it was originally granted. How many years are left to run on the lease is not relevant. The legislation only applies to residential property, not a business or commercial lease. Importantly, the property will not qualify for a statutory lease extension if the landlord is a charitable housing trust and your flat is provided as part of the charity’s work.

If you are in the process of buying a short-lease property, there is a way to get around the 2-year ownership clause. Assuming the seller has owned the property for more than 2 years, he can initiate the statutory process and assign the benefit to you as part of the contract of sale.

  1. How do you start the statutory lease extension process?

To get the ball rolling, a lease extension valuation must be carried out on the property in order to determine how much to offer the freeholder, and to give you an idea of the financial liability involved. Once this has been done, your solicitor will serve a formal S42 Notice on the freeholder to initiate the process.

The freeholder than has 2 months in which to serve a Counter Notice, which will typically request a higher premium payment. Thereafter follows a 6-month negotiation period to reach agreement, though either part can refer the matter to the Leasehold Valuation Tribunal (LVT) after 2 months. In our experience, the vast majority of cases are settled without the need for a formal hearing. It should be noted that you will be responsible for the freeholder’s valuation fee and legal fees as well as your own.

  1. How can Able Surveyors help?

As experienced lease extension surveyors in London and the Home Counties, Able Surveyors can help you navigate this complex procedure, ensuring that fair freeholder compensation is negotiated. We specialise in carrying out the requisite lease extension premium valuations, entering into negotiations with the freeholder on your behalf and, where necessary, preparing for and representing your interests at Tribunal.

If you have any questions about extending the lease on your property, need advice on buying a freehold property or would like expert assistance with any surveying matter, please don’t hesitate to get in touch.

How to buy a flat with a short lease

Are you looking to by a flat, either for your own use as a home or as a buy-to-let investment? Flats including apartments and maisonettes are generally sold on a leasehold basis, and the length of the remaining lease has a big impact on the property value. The price of a short lease property, therefore, may be appealing. However, before you go ahead with the purchase of a short lease flat, it is highly recommended that you do your homework to fully understand the legal and financial implications you are taking on.

What constitutes a short lease?

Residential leasehold properties usually have an initial lease term of 99 years or more. 125 years and even 999 years are also quite common. Properties with less than 70-80 years left to run are generally regarded as having a short lease. Of course, this doesn’t prevent these types of flats from being sold. In fact, properties with leases of as little as 5 years or less remaining still happily change hands.

That being said, the point is that leasehold property is, by definition, a depreciating asset. This means that ownership of the property will revert to the freeholder once the lease term has expired, unless the lease is extended in time.

How to extend a short lease

The good news is that leasehold owners have a statutory right to extend the lease of their property under the Leasehold Reform, Housing and Urban Development Act 1993. “A lease extension under the 1993 Act gives the leaseholder the right to an additional 90 years on top of their remaining term at a peppercorn ground rent,” explains one expert in the field.

To qualify for a statutory lease extension, the original lease term must have been at least 21 years, and the leaseholder must have owned the property for at least 2 years. Of course, this is of little use to a prospective buyer, but all is not lost. If the seller fulfils the eligibility criteria, you can request that they initiate a statutory lease extension as a condition of purchase. This benefit can then be assigned to you on completion of the sale.

Outside of the statutory framework, there is nothing to stop the leaseholder from approaching the freeholder with an informal request for a lease extension. In this scenario, there’s no need to wait 2 years and any private agreement reached between leaseholder and freeholder will be perfectly valid in law, albeit without the statutory protection.

Should you let the lease run down?

A lease extension is not always the right course of action; there are certain circumstances where it might make sense to let the lease run down. Short lease flats may be an attractive option for retirees and homebuyers who have no-one to leave their estate too after death, meaning they don’t need to worry about protecting the value of their property asset.

Short lease properties can also make very attractive buy-to-let investments. The profit made from renting out the flat for the remainder of the lease term can amount to a multiple of the initial purchase price. Once the lease is up, the property reverts back to the freeholder.

That said, short lease flats are often in a poor state of repair and may require extensive (and expensive!) refurbishments before they become a viable rental property, while service charges and ground rent may be considerable. Make sure you know exactly what you are buying.

Can you get a mortgage for a short lease flat?

Unfortunately, it is rather difficult to obtain a mortgage for a flat with a short lease. Lenders typically refer to the years remaining on the lease as the ‘minimum expired lease term’ and the shortest term acceptable will vary between mortgage companies. The majority of lenders consider a short lease to be one that has fewer than 75-85 years remaining. “You may be able to find a provider willing to lend on a 65-year lease, but this is very rare,” advises one mortgage comparison website.

Speak to an experienced mortgage broker to investigate all possibilities including specialist lenders and shorter mortgage terms, and be prepared to pay much higher mortgage interest rates to cover the lender’s additional risk.

What are your options?

Given the difficulties of securing a mortgage, short lease flats tend to be sold at auction rather than through the traditional estate agent route. Auction buys can be financially attractive and if you are able to pay cash for the flat, it could make the property a good investment.

However, don’t forget to factor in the cost of having to extend the lease yourself, which can be substantial. The shorter the remaining term, the higher the cost of a lease extension. If you include lawyers’ and surveyors’ fees, the cost can run into £10,000s for a property with 60-70 years left, rising steeply for shorter leases. Here’s a handy calculator to help you do the initial sums.

Your best option would be to ask the seller to initiate statutory lease extension proceedings before the completion of sale, and come to an agreement regarding cost sharing.

How to renegotiate with the vendor after a bad survey

The property transaction won’t become legally binding until contracts are exchanged, and before that happens, we urge you to commission an independent home survey. With one of our experienced building surveyors investigating the condition of the property and delivering their findings in a detailed report to you, you can make key decisions on whether and how to proceed with the purchase.

Bad survey results

Speaking from many years’ experience in the property surveying business, it is by no means unusual for a survey to flag up problems with the building that the buyer is unaware of. From structural issues such as subsidence, damp, timber and roof defects to invasive garden species including the dreaded Japanese knotweed, a bad survey result can certainly take the shine off your new home.

If you decide to go ahead with the purchase in full knowledge of the facts, you may want to reconsider the price in light of the survey findings – and you are absolutely within your rights to do so. Your offer to purchase is ‘subject to contract’, which includes the results of any survey that is undertaken. If defects in the construction are identified, or our surveyors have highlighted that repairs are needed, then these will clearly affect the property value.

How will the vendor and their agent react?

Estate agents are a hardy sort; they’ve probably seen every conceivable building problem under the sun and are unlikely to be fazed by your request to renegotiate the price on account of a ‘bad’ survey result.

What’s more, the agent won’t have been aware of issues with the property when they valued it for sale, so when new information comes to light that has a bearing on the value, asking for a discount is not an unreasonable request.

The vendor and their estate agent should certainly not dismiss your concerns. After all, you could pull out of the transaction at any point before contracts are exchanged – do they really want to risk losing you as a buyer? And if the property does go back on the market, other buyers are bound to find the same defects.

How to renegotiate a previously accepted offer

If you are serious about asking for a discount, don’t just tell the estate agent over the phone and ask them to pass the message on to the vendor. Instead, take the formal route and put your request in writing, explaining that you are putting forward a new offer as a result of the findings provided by an independent RICS Chartered Surveyor.

It is worth emphasising in your letter that you are still very much committed to the purchase, but that you are not prepared to pay the full agreed price when serious defects were found and repairs are clearly needed. You can also add a polite note to say that other buyers would face the same problem.

Hopefully, the vendor will realise how inconvenient, time consuming and costly it would be to have to find a new buyer, and be motivated to accommodate your request.

What your letter should contain

Your best approach to successfully renegotiate the purchase price with the seller is to construct your arguments on evidence-based facts and deliver these politely but clearly.

  • List all the serious defects highlighted in the property survey along with their associated costs of repair, such as are included in our Level 3 RICS Building Survey.
  • By way of evidence, it’s worth providing a copy of the specific pages of the survey report that relate to the repairs. There’s no need to supply a copy of the whole survey to the estate agent or the vendor.
  • Total the costs and decide on what you would consider a reasonable discount off the original accepted offer price. You may decide to claim for the entire cost of repairs, or come to a cost sharing agreement with the vendor.
  • In order to strengthen your proposal and renegotiation chances still further, include the name of any contractors who have given quotes.

In receipt of your fully considered proposal, the seller will now need to consider their options and get back to you within a few days, so as not to risk derailing their sale. All you can do now is to keep your fingers crossed, and remain flexible in reaching a mutually agreement outcome to your negotiations, so that your home purchase can stay on track.

At Able Surveyors, we have 25+ years’ experience providing expert advice and guidance to prospective home buyers to help them make the right decision, and we can assist you too. Contact us to discuss your specific requirements and let us advise on the best choice of RICS home survey – HomeBuyer Report or Building Survey. We look forward to hearing from you.

Your guide to subsidence

Subsidence is one of those fearful words that no homebuyer wants to hear. But what exactly does it mean for the property, and what can you do about it? At Able Surveyors, we are experienced at detecting signs of subsidence in properties of all ages. Our professional service portfolio includes the full range of RICS home surveys, meaning we can advise you of major faults and building defects before you proceed with the purchase. In addition, we can provide ongoing monitoring services for newly detected cracks and other situations where the presence of structural movement in a building is suspected and must be confirmed (or ruled out).

What is subsidence?

In basic terms, subsidence happens when the ground on which the building stands begins to sink. Unstable foundations can cause the house to become askew and strained by the movement below. Structural damage can occur that calls into question the integrity of the building. While, ultimately, this could lead to the collapse of the structure, in practice subsidence can often be dealt with quite easily, particularly if the signs are spotted early on.

What causes it?

There are many reasons why subsidence may occur. Moisture plays a critical part and this can manifest in various ways. If the house is built on clay soil, for instance, the ground is likely to swell and shrink with rising and falling moisture content through the seasons. This can cause natural shifts which may well affect the building on top. Soils such as gravel and sand, on the other hand, won’t shrink or swell but could be at risk of being washed away as a result of extended periods of wet weather or, more likely, damaged underground drainage pipes.

The water content of the soil is also affected by trees, shrubs and bushes growing near the building. Plants draw up the moisture they need through their roots, leaving the soil drier and therefore more susceptible to shrinkage. The effect is obviously compounded on clay soils. Some trees such as willow, poplar, oak and elm are particularly thirsty and should always be situated at a safe distance from the house, and preferably not planted at all in a regular-sized garden.

Other causes of subsidence can include seemingly innocuous things like persistent traffic-induced vibrations and building work close to the house, long-term leaking underground pipes, and a history of mining in the area.

How to spot the signs

If there is subsidence, detecting it early will make remedial work much easier and potentially a lot cheaper. Tell-tale signs include cracks in the wall that appear suddenly and are:

  • Generally larger than harmless plaster cracks (>3mm)
  • Typically diagonal in nature, often being wider at the top than at the bottom
  • Often situated around windows and doors, or where an extension joins the main building
  • Visible on the inside and outside of the property

Drops in flooring is another potential indicator of subsidence. Uneven skirting boards, with gaps underneath, and uneven surfaces elsewhere, may all point to structural movement having occurred.

At Able Surveyors, our team have a keen trained eye and will be able to tell the difference between cracks that are perfectly normal and nothing to worry about, and signs of subsidence, which will be clearly documented in our survey report.

Should you buy a house with a history of subsidence?

Of course, the $64,000 question is whether you should run a mile from any house that has suffered from structural movement at some point, or whether it is OK to proceed with the purchase, and at what price. Our professional advice is to obtain all the salient facts before making your decision. To that end, we recommend that you:

  • Have a full RICS Building Survey carried out to establish the nature and severity of any structural problems. The report will also contain our recommendations for remedial action along with cost estimates.
  • Discuss the property with your mortgage broker or lender as a matter of priority. Lending criteria vary between mortgage companies, and additional checks will be necessary, while some may refuse to provide finance on subsidence affected properties altogether.
  • Obtain proof from the seller that any historic subsidence issue has been fixed, including details of what was done (monitoring, underpinning etc) and when it was completed.
  • Research home insurance options for properties with a history of subsidence. Standard home insurance cover may not be available, or only at exorbitant premiums, but there are many niche insurance providers who may be suitable.

What price should you pay?

While there is little doubt that a house afflicted by subsidence, past or present, will be worth less than a comparable property where structural movement is not an issue, it is difficult to put a clear figure on this. Every property is different, and it is up to the seller and the buyer to negotiate a mutually agreeable purchase price.

This is where a RICS Building Survey can be hugely helpful to the buyer. Armed with the detailed report findings regarding the structural condition of the building, you are now in the best possible situation to make an informed decision, whether you choose to proceed with the transaction as planned, ask the seller to remedy the problem, renegotiate the price or walk away from the sale.

If you would like to discuss your next property purchase with our expert team, or get an instant survey quote, please contact the Able Surveyors team.

Common property survey myths busted

Property surveying is a complex technical discipline with information that is often hard to comprehend unless you are a Chartered Surveyor yourself. Little wonder, then, that there are many myths and misconceptions surrounding building surveys circulating among homebuyers who have no experience in the field. Let’s take a look at four of the most common wrongly-made assumptions and replace fiction with facts.

1 – You don’t need a property survey if you have a mortgage valuation

One of the most common falsehoods is the belief that a mortgage valuation is enough. Please be warned that this is not the case. A property valuation carried out on behalf of your lender is for their benefit only; its sole purpose is to ensure the property is worth the loan you are applying for. Often little more than a tick-box exercise performed during a brief site visit, it gives next to no information about the condition of the property, and you may not even get to see a copy. An independent property survey such as the level 2 RICS HomeBuyer Report or RICS Building Survey, on the other hand, is an impartial inspection of the property to assess its condition, carried out on your behalf to protect your investment.

2 – A survey is nice to have but the money could be better spent elsewhere

Unfortunately, many homebuyers still believe that an independent property survey is a needless expense. But think of it this way: you wouldn’t buy a car without giving it a thorough once-over first, so surely the same principle applies to what could well be the biggest financial commitment you will ever make? A survey may cost a few hundred pounds but the findings may include hidden and unexpected defects that may cost thousands to rectify later on. It could even flag up serious issues that may make you change your mind about the purchase, or the price. Rather than a needless expense, think of a property survey as due diligence to ensure you’re making a sound investment.

3 – Survey reports are deliberately vague to cover the surveyor’s back

Another cynical misconception is that survey findings are purposefully reported in an unclear fashion so as to protect the surveyor from any legal action if problems are later uncovered that should have been flagged up in the survey. With a reputable and experienced firm of RICS-accredited Chartered Surveyors such as Able Surveyors, that won’t be the case. We meticulously inspect every property and deliver a comprehensive and detailed report of the condition of the property. Our aim is to provide you with full feedback, including implications of any defects found, so that you have all the information you need to make an intelligent purchase decision.

4 – I won’t be able to understand the survey report, so there’s no point having one

At Able Surveyors, we offer the full range of RICS home surveys –including RICS HomeBuyer Reports and in-depth RICS Building Surveys – as well as a range of specialist investigations. Our reporting follows a standardised structure and clear, jargon-free language to enable everyone to understand the findings and their implications. We will go the extra mile to ensure that you fully understand all the information presented, offering opportunities to discuss the survey findings with our surveyors and obtain plenty of professional advice and guidance from our competent, friendly team.

If you are thinking of buying a property, don’t make the mistake of skipping the survey – you could regret the decision in years to come. An independent home survey is the best way to provide you with the peace of mind that your investment is sound. At Able Surveyors, we can advise on the best choice of property survey for your needs, answer any queries you may have and provide an instant quote. Please feel free to get in touch.

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