It's every homeowner's worst fear – you find your perfect property and get the sale processed, only to find a bunch of worrying problems as soon as you move in.
Well that's exactly what happened to Michaela and David Colville-Wright in Somerset. In 2013 they purchased a beautiful looking barn conversion, consisting of a cottage, annexe, and separate block of accommodation for bed and breakfast guests.
Like many buyers, they solely relied on their mortgage providers valuation to provide an assessment as to the buildings current state, rather than commissioning their own independent survey.
Costing £650, and containing 28 pages; when the valuation came back confirming that the property was worth the £500,000 being paid, they could perhaps be forgiven for thinking that it'd be comprehensive enough to allay any fears about underlying structural issues.
In reality, upon moving in it immediately transpired that there was some serious issues. “On our first night we encountered the problem of kitchen drawers sliding open by themselves”, said David. After a closer inspection further problems began to reveal themselves, and the couple had to prop books under couches and beds to get them to sit level.
The couple were forced to commission their own survey to investigate the problems more thoroughly, and to put a price on setting it straight. This report revealed a series of serious defects which should have been 'apparent from just a visual examination'; including the dreaded subsidence, in all parts of the property. Alongside this other related problems were outlined such as a bowed roof, missing mortar, bad tiling, walls out of 'plumb, and external and internal cracking of the walls. How all of this was not picked up by the couple mortgage valuation is a mystery, with the total cost of repairs needed being around £165,000.
The Colville-Wright's soon learned that they could not pursue the firm employed to carry out the initial valuation by the lender, as legally the survey was undertaken for the bank and not the buyers.
Potential homeowners should be aware that this is the norm with valuations; although lenders make the buyer pay for the valuation, it's the actually lender who is commissioning the survey.
The couple then decided to pursue the case with their lender, NatWest. The bank however refused to intervene, pointing out that it had lost no money. Unfortunately their claim wasn't helped by the fact that they'd initially put down a 30% deposit on the place.
Finally they took it to the Financial Ombudsman, who confirmed that NatWest had not caused the couple any financial loss, and could therefore not intervene; leaving the couple with nowhere to go but to pick up the whole bill themselves.
In short, the case highlights the confusion caused by 'mortgage valuations' – as if they are somehow useful or informative to the buyers. Simply put, if you're buying a property, you need to have your own survey conducted. For more information refer to our guide 'First Time Buyers – Guide to Building Surveys'