Are Cracks in Bricks Normal?

While we often think of bricks being near indestructible, this is often not the case. Most properties will see some form of cracks forming through the years, however understanding why they’re happening and how to prevent it getting worse is essential. So are cracks in bricks normal?

Seeing small or hairline cracks in bricks will happen from time to time. However, it’s important to repair these to stop them from getting worse. If you see larger cracks that span across multiple bricks, this could be a structural issue and will need immediate attention from a professional.

Read on to find out more about if cracking in bricks or brick mortar are normal, when to worry about a crack, and how to repair them.

Are Hairline Cracks in Brick Normal?

Hairline fractures in clay bricks can often happen in different ways. Cracks will often occur from external factors such as water, rain,  and shifting soil. or when the house settles. Due to a brick’s inflexible nature, factors like these can cause the brick to crack and fracture.

Hairline cracks in bricks generally aren’t anything to worry about, however it’s always a good idea to repair them with masonry repair caulk or specialised mortar before they become wider and deeper. This is because cosmetic cracks can often become larger, structural issues over time.

While these are usually fixable with some DIY, if you’re unsure about any hairline fractures in bricks it’s always better to get an expert’s advice. We offer RICS Building Surveys that are perfect for anyone that wants to check for structural damage before committing to a home purchase.

When to Worry About Cracks in Bricks

When a crack becomes structural, that’s when there’s a real issue with the property. These cracks will usually take the form of a staircase, with diagonal jagged lines running through multiple bricks.

Some of the biggest indicators of structural cracks are diagonal cracks that:

  • Are found above doorways or door frames
  • Can show natural light through them
  • Are deep in appearance
  • Are wider than 5mm

Are Cracks in Brick Mortar Normal

While small cracks in brick mortar aren’t a major issue, leaving it to worsen can cause structural issues further down the line. It’s important to prevent this, and take care of the small cracks with some DIY. A hairline crack in the brick mortar doesn’t mean that there are structural issues, so you’ll generally be fine.

When to Worry About Cracks in Brick Mortar

If the cracks are running through a lot of the mortar on a particular wall, this could be an issue such as the foundation slumping and causing the wall to shift. Similarly, if the cracks are wider than a hairline crack or if the mortar is falling out from between the bricks, this is the sine of a hidden structural problem and you should get this checked.

If you’re looking at buying a house and spot excessive cracks in the property’s brick mortar, you might want to get it checked with an RICS registered surveyor such as Crest Surveyors to ensure there’s no further problems. We can perform RICS level 2 and level 3 surveys, so no matter what the condition of the property, we’ll be able to provide you with comprehensive advice to help you make the right decision.

How to Repair Cracks in Brick Walls

The process for repairing a crack in a brick wall will often vary depending on the position of the crack on the wall and the cause of the crack. We found this summarised step-by-step guide on how to repair cracks in brick walls:

  • Remove any cracked mortar from the wall up to 2cm deep using either a chisel or raking bar. 
  • Brush away any excess dust or mortar.
  • Spray the old mortar with water to stop it absorbing too much water.
  • Fill the loose sections with new mortar using a jointer brush – make sure not to leave any gaps/voids.
  • Use a pointer to flatten the mortar and fit the style of the surrounding walls.


Building Surveys With Crest Surveyors

At Crest Surveyors, we help homebuyers make the right decision on their potential new property by conducting in-depth RICS Homebuyer Surveys (level 2) and RICS Building Surveys (level 3). All of our surveyors are RICS approved, meaning that you can make your decision with confidence.

We know that buying a property can be a very stressful time, and that’s why we work to have our surveys completed at an affordable price within 2-3 weeks. Get in touch with a member of our friendly team for more information on how we can help you today.

What Are the Stages of Buying a House in the UK?

An open door showing the lock and empty home behind

Buying a new house can be a daunting time for many people, especially first-time buyers. Understanding the process in advance can help you calm your nerves and make an informed decision at each step. In this guide, we’ll explain the 6 stages of buying a new home.

So what are the stages of buying a house in the UK? In the UK, there are 6 stages of buying a new house that should be performed in order to ensure the process runs as smooth as possible:

Finding an affordable property

  • Making an offer
  • Finding a solicitor and surveyor
  • Finalising your offer and mortgage
  • Exchanging contracts
  • Completing the purchase

Read on to find out more about the 6 stages of buying a house in the UK.

 

What Are the Steps of Buying a House in the UK?

Buying a new house can often be a complicated process. With so many loops to jump through, many first-time buyers can feel lost and confused, and worry that they aren’t covering everything that’s needed. Below, we’ve broken down the 6 steps of buying a house in the UK.

Find an Affordable Property

The first step is to find a property that you can comfortably afford. To do this, you’ll first need to spend some time calculating how much you can actually afford to spend without breaking the bank. This will affect the house that you’re able to purchase and the mortgage that you can afford. Make sure to include any known budget changes that might happen in the future, and ensure that you’re able to afford to live on top of it.

At this stage, you should also be looking at applying for a mortgage as it can be a time consuming process. Once you’ve found one and been accepted ‘in principle’, the lender will tell you how much they’re likely to offer you and the interest rate you’ll pay. You can then use this to further narrow down your budgets and property choice.

Take your time finding a property and ensure you’re happy with your choice. View as many as you can within your budget and look at external factors such as schools, transport, and anything else that matters to you. Once you’ve made your decision, you can move onto making an offer.

There are a lot of options out there for ways to purchase a property. Check out our blog, ‘Is buying a shared ownership property a good idea?’ to see if it’s right for you.

Make an Offer

At this stage, you’ll want to make your offer. This is usually done through the estate agent that’s advertising or managing the sale. Don’t be afraid to ask them questions about what the seller wants, but bear in mind that they’re trying to get the best deal for their client!

You won’t need to pay the estate agent to receive your offer, as you only have to pay for the estate agent if you’re the one selling the property. 

Find a Solicitor and Surveyor

Once your offer is accepted, you’ll need to find a solicitor and a surveyor to make sure everything runs smoothly.

Solicitor

The solicitor’s job is to handle the legal work regarding the property’s purchase. They should provide you with information around how much you should expect to pay for their services in total, and might ask for an upfront deposit – around 10% of their fee.

The solicitor will submit requests to the local council to find out whether there are any planned works or local issues in the area that might inadvertently affect the property’s value.

Surveyor

two people surveying a house

The job of a surveyor is to provide a thorough inspection of the property and a detailed report based on the inspection to highlight any defects. This can also include a valuation if required. 

The surveyor will independently value the property and check for any defects that will devalue the home, such as damp issues or structural issues. There are a few surveys that might need to be carried out:

RICS Property Valuation

A RICS property valuation is an independent analysis  of a property by a RICS registered valuer. Once completed, this is followed by a detailed report that highlights the findings and provides their valuation. 

Valuations can be particularly important, as the property may be valued less than the estate agent’s valuation to put the property up for sale. Their valuation may have also been completed a long time ago if the property has been on sale for some time, so there may have been things that occurred to devalue the property since then.

At Crest Surveyors, we offer valuations backed by years of experience from highly qualified RICS registered valuers. Our RICS Property Valuation prices start from:

  • £349 for up to a 2-bed property

  • £369 for a 3-bed property

  • £399 for a 4-bed property

  • £449 for a 5-bed property

Should you wish, you can add a valuation to one of the surveys below for an optional cost of £99.

RICS Homebuyers Survey (Home Survey Level 2)

The RICS homebuyers survey is a standard report designed by the Royal Institution of Chartered Surveyors (RICS). The report highlights important information about the condition of a property. This assessment will cover all areas of the property, beyond what can be seen visually, with the aim of evaluating its condition and helping buyers make an informed decision.

This is a vital step in the house buying process. Once you complete your purchase, any unidentified defects are now your financial responsibility, so it’s important to identify these and negotiate the price accordingly to cover it. For example, if the identified defects will cost you £6,000, instead of having to pay that yourself, you can negotiate the price down by this amount to cover the costs.

Crest Surveyors offer a comprehensive RICS Homebuyer Survey starting from just £649. Our full list of prices include:

House / Bungalow prices start from:

  • £699 for up to a 2-bed property

  • £749 for a 3-bed property

  • £799 for a 4-bed property

  • £849 for a 5-bed property

  • Properties over £1 million are charged at a higher fee.

* Include a Property Valuation for an additional £99.

Flat / Apartment prices start from:

  • £649 for up to a 2-bed property

  • £699 for a 3-bed property

  • £749 for a 4-bed property

  • £799 for a 5-bed property

  • Properties over £1 million are charged at a higher fee.

* Include a Property Valuation for an additional £99.

For more information on what to expect from a Homebuyers Survey (Level 2), read the RICS guide on Homebuyers Surveys.

RICS Building Survey (Home Survey Level 3)

A RICS building survey contains a detailed analysis of the property’s current condition and construction. It also comes with a comprehensive report detailing the defects, repairs, and any costs associated with their maintenance and repairs. 

The building survey acts as a more detailed homebuyers survey that is designed to assess listed buildings or properties that are over 100 years old. However, there are other reasons you may want to perform a building survey instead of a homebuyers survey:

  • If the building has a history of structural damage

  • There are significant damages or defects in the property

  • If you suspect that the property might have damage

At Crest Surveyors, all of our surveyors are members of the Royal Institution of Chartered Surveyors (RICS), providing you with the quickest and most cost-effective survey possible. Our RICS Building Survey prices start from:

  • £900 for up to a 2-bed property

  • £969 for a 3-bed property

  • £1049 for a 4-bed property

  • £1199 for a 5-bed property

  • Properties over £1 million are charged at a higher fee.

Should you wish, you can add a valuation to your survey for an optional cost of £99.

For more information on what to expect from a Building Survey (Level 3), read the RICS guide on Building Surveys. Alternatively, you can read our easy guide for information on the difference between valuations and surveys.

 

Finalise Your Offer and Mortgage

A couple shaking hands with their property manager

Once your surveys have been completed, you might need to renegotiate your offer if issues were uncovered, or the lender values the property at a lower price. This stage is generally the most stressful stage of buying a house in the UK, because there are often delays and a lot of back and forth.

These problems can include:

Rejection from your mortgage application

  • The seller withdrawing the property from the market
  • The seller accepting a higher offer elsewhere
  • The seller rejecting your revised offer

If everything has gone to plan, you can finalise your mortgage with your lender. There’s usually a fee for this called an arrangement fee, this can either be added to your mortgage or paid in advance. If you add it to the mortgage, you’ll end up paying interest on this for the life of the mortgage.


Exchange Contracts

You will then receive the contract from the seller to sign and complete the sale. Make sure that you go through the entire contract with your solicitor before signing to ensure that all the details are correct. You should also double check that you’re happy with what the sellers will be leaving in the property and that all of your questions have been answered.

You may also need to pay a holding deposit, but once you’ve covered this and exchanged contracts, the sale is ready to go! You should then find building insurance to cover the structure of the property.

Completion

Even though the contracts have been exchanged, the final steps of the process can still be stressful. The remaining money is sent from your solicitor to the seller’s, and your lender will normally charge a mortgage account fee to set up your account. Once these are completed, you’ll also need to pay your solicitor’s bill.

Your solicitor will then register the transfer of ownership with the Land Registry, as well as registering it with Land and Property Services.

You will have 14 days from the completion date to file the Stamp Duty Land Tax Return and pay any tax due. Your solicitor will usually arrange this with you, so ask if it isn’t mentioned. Once completed, that’s everything you need to do!

Homebuyers Surveys at Crest Surveyors

At Crest Surveyors, we provide RICS property valuationsRICS homebuyer’s surveys, and RICS building surveys across London and Surrey. With years of industry experience and in-depth knowledge of our local area, we work to provide you with the highest quality of service. Our surveys will let you know if there are any issues or defects with your property or potential new purchase, before you sign the contract. 

Whether you’re a first-time buyer or an experienced mover, you’ll need a Homebuyer Survey or building survey to provide you with a full understanding of the building’s current condition. Our local and affordable services are here to help you make the process simple and easy. Get in touch with one of our RICS-qualified specialists today to book your survey.

How Long is a Party Wall Agreement Valid For?

The door of a house with a bike outside

If you’re planning a project that may affect the party walls of your property, you’ll need to inform your neighbours with a party wall notice. In this blog, we’ll explain how long a Party Wall Agreement is valid for and where to find any key information you may need. 

So, how long is a Party Wall Agreement valid for? A Party Wall Agreement is generally valid for one year from the date of the award. This agreement needs to be set up before any construction work takes place. 

Keep reading to find out more about the Party Wall Agreement as well as how it works for adjoining owners and surveyors. 

How Long is a Party Wall Agreement Legally Valid?

Generally, a Party Wall Agreement is legally valid for one year from the date of the award. According to the Act, a building owner has to commence works within one year of the award being deemed to have been validly served.

That being said, if an award is served and there are no disputes from either party, the date upon which the clock will start ticking will be 14 days after the date of service. This is because the Act provides 14 days in which opposing parties can raise an appeal.

Under the act, any party to the award can appeal the surveyor(s) decision or any of the terms and conditions therein to a County Court within 14 days of receipt of the award. If one of the parties to the award decides to file action, the clock would not start ticking until a final determination was made by the court. 

Litigation can be a long drawn out and costly exercise, which is why if you can, it’s always best to avoid it. 

How Long in Advance Do You Have To Serve The Notice?

You need to serve notice at least two months before the planned starting date for work to the party wall. The adjoining owner may agree to allow works to start earlier but is not obliged to, even when agreement on the works is reached. The notice is only valid for a year, so do not serve it too long before you wish to start.

Does The Party Wall Agreement Have a Statutory Limitation Period For Surveyors?

It’s worth noting that there is no statutory limitation period with regard to surveyors. It would appear that under The Party Wall etc. Act 1996, surveyors have been granted powers to act in relation to; “any other matter arising out of or incidental to the dispute”.

There are no time limitation restrictions on surveyors to resolve disputes. As long as the damage caused to an adjoining owner’s property was caused by works that had been carried out under a Party Wall Award, the surveyor has the power under the Act, to enforce compensation or draw up a new award.

However, if the building owner fails to comply with the terms or conditions of the new Award, an application to the Court to enforce it must be made within 6 years of the date of the new Award.

When Does an Adjoining Owners’ Protection Expire Under Party Wall Awards?

This is a difficult question to answer because it is not addressed under the provisions of the Act. However, an answer can be found under sections 2, 7 or 9 of the Limitation Act 1980

Under section 2 of the Limitation Act 1980, an adjoining owner has a right to make a claim for monies owed under the Award directly to the court. If monies are owed as a result of the award specifying that monies should be paid within a certain time frame, then the claim must be made within a maximum of 6 years from the expiry of the date that was stipulated by the Party Wall Award. 

Under section 9 of the Limitation Act 1980, an adjoining owner can make a claim directly to the Court for monies due under a statute. It is worth noting that a claim under this section must be commenced within six years of the date that the claim arose.

Why Choose Crest Chartered Surveyors For Your Party Wall Agreement

If you’re planning to carry out home improvement projects on the boundary walls of your home or garden, you’ll need a Party Wall Agreement with affected neighbours before works can begin. Whilst builders and contractors can advise you, they will not be able to service a party wall notice on your behalf. 

Here are some reasons why you should choose Crest:

  1. All of our surveyors are members of the Royal Institution of Chartered Surveyors (RICS), some of which are also members of the Institute of Party Wall Surveyors. 

  2. We have extremely high standards and are committed to upholding strict RICS standards in all works.

  3. We’ll always go the extra mile to ensure that hassle and stress is kept to a minimum. 

Party Wall Surveys at Crest Chartered Surveyors

Now that you know how long a Party Wall Agreement is valid for, take a look at Crest Chartered Surveyors Party Wall Surveys

If you’re planning a project that may affect the party walls of your property, you’ll need to inform your neighbours with a party wall notice. Here at Crest Chartered Surveyors, we’ll help you draft this notice and handle any disputes on the way to obtaining your Party Wall Agreement . 

Call us on 020 3940 1118 for more information or get in touch today with our friendly team to find out more.

FAQs

What is a Party Wall Agreement?

The Party Wall Agreement provides a framework for preventing or resolving disputes in relation to party walls, party structures, boundary walls and excavations near neighbouring buildings. 

The agreement came into effect on the 1st of July 1997 and applies throughout England and Wales. (Note – The Act does not apply to Scotland or Northern Ireland). 

Anyone planning to carry out work of the kinds described in the Act must give Adjoining Owners notice of their intentions. The Act applies even to Crown, government and local authority owned property. Where the intended work is to an existing party wall (section 2 of the Act) a notice must be given even where the work will not extend beyond the centre line of a party wall.

What Does The Agreement Cover?

The Party Wall Agreement  covers: 

  • Various work that is going to be carried out directly to an existing party wall or party structure (paragraphs 4 to 20)

  • New building at or astride the boundary line between properties (paragraphs 22 to 26)

  • Excavation within 3 or 6 metres of a neighbouring building(s) or structure(s), depending on the depth of the hole or proposed foundations (paragraphs 28 to 30).

Work may fall within more than one of the above categories and involve different types of buildings and structures for example, houses, garages and office buildings.

If you are not sure whether the Act applies to the work that you are planning, you may want to seek professional advice. 

What is a Party Wall? 

The Act recognises two main types of party wall:

Party Wall Type A

A wall is a “party wall” if it stands astride the boundary of land belonging to two (or more) different owners.

Such a wall:

  • is part of one building 

  • or separates two (or more) buildings 

  • or consists of a “party fence wall” 

A wall is a “party fence wall” if it is not part of a building, and stands astride the boundary line between lands of different owners and is used to separate those lands (for example a masonry garden wall). This does not include such things as wooden fences or hedges.

Party Wall Type B

A wall is also a “party wall” if it stands wholly on one owner’s land, but is used by two (or more) owners to separate their buildings.

An example of this is where one person has built the wall in the first place, and another has built their building up against it without constructing their own wall.

*It may also be useful to know which walls are NOT party walls – These include boundary walls (a fence wall/garden wall built wholly on one owner’s land) and external walls (the wall of a building built up to but not astride the boundary). 

Which RICS Survey Do I Need?

A cosy cottage surrounded by gardens

When embarking on the journey of buying a new home in the UK, understanding the condition of the property is vital. To ensure a smooth and informed house buying process, the Royal Institution of Chartered Surveyors (RICS) provides various survey options tailored to suit different needs and requirements. This includes a Level 1 Survey, a Level 2 Survey and a Level 3 Survey. 

So, which RICS Survey do I need when I’m buying a new home? The survey you need to purchase a new home will depend on a variety of factors. This includes the property type and age, the properties current condition, and your desired budget for your survey. 

 

To help you decide which survey is best for you, and to learn more about what the different levels of surveys offer, our experts at Crest Chartered Surveyors London have written this short guide for you to explore. Simply keep reading to learn more…

Why are RICS Surveys Important?

Before delving into the different levels of RICS surveys, it is essential to understand their significance in the property purchasing process. RICS surveys are conducted by qualified chartered surveyors, providing potential buyers with an objective evaluation of the property’s condition. They help identify potential defects, structural issues, and maintenance requirements that may not be apparent during a standard viewing. Armed with this knowledge, homebuyers can make informed decisions and negotiate the purchase price more effectively.

RICS Level 1 Survey: Condition Report

The Level 1 RICS survey, known as the Condition Report, offers the most basic level of survey and is suitable for relatively new or well-maintained properties. This survey focuses on providing a snapshot of the property’s condition, highlighting any evident defects and offering guidance on necessary actions.

The Condition Report covers essential elements such as:

  • Identifying significant issues affecting the property.

  • A traffic light rating system indicating the severity of defects (red for urgent, amber for potential issues, and green for no significant problems).

  • A brief overview of the property’s construction and key features.

Level 1 surveys are relatively affordable and ideal for buyers looking for a general overview of the property’s condition without extensive details.

RICS Level 2 Survey: HomeBuyer Report

The Level 2 RICS Home survey, commonly known as the HomeBuyer Report (HBR), is more comprehensive than the Level 1 survey. It is suitable for conventionally built properties in reasonable condition and is one of the most popular choices among UK homebuyers.

The HomeBuyer Report includes:

  • A thorough inspection of the property’s visible and accessible areas.

  • Evaluation of major elements, including roofing, walls, floors, and ceilings.

  • Identification of any significant defects, urgent problems, or potential risks.

  • An estimation of the property’s value.

  • Recommendations for repairs and ongoing maintenance.

  • Additional advice for legal advisors and insurance providers.

HomeBuyer Reports provide a good balance between detail and cost-effectiveness, making them an excellent choice for many homebuyers in the UK.

RICS Level 3 Survey: Building Survey

The Level 3 RICS survey, known as the Building Survey or Full Structural Survey, offers the most detailed and comprehensive assessment of a property’s condition. It is suitable for older or larger properties, those with unusual construction, or properties that have undergone significant alterations.

The Building Survey includes:

  • A comprehensive inspection of all accessible areas, including concealed spaces like attics and basements.

  • Thorough evaluation of the property’s structure, materials, and construction methods.

  • In-depth analysis of potential defects, including subsidence, damp, and rot.

  • Detailed advice on repairs, maintenance, and future considerations.

  • Estimated costs for necessary repairs and renovations.

The Building Survey provides buyers with a comprehensive understanding of the property’s condition, offering peace of mind and confidence in their purchase decision. However, it is also the most expensive survey due to its extensive scope and level of detail.

How Do I Know Which RICS Home Survey Is Right For Me?

 

When buying a new home, it is crucial to know what type of survey you need to gain a comprehensive understanding of the property’s condition. A survey conducted by a qualified chartered surveyor can reveal potential issues and defects that may not be apparent during a regular viewing. Understanding the various survey options available will help you make an informed decision, ensuring a smooth and confident house buying process.

Factors to Consider:

  • Property Type and Age: The age and type of property you are considering will significantly influence the type of survey required. Older properties, those with unique construction, or listed buildings often demand a more detailed assessment, such as the Level 3 RICS Building Survey.
  • Property Condition: If the property appears to be in good condition and relatively new, a Level 1 RICS Condition Report may suffice. This basic survey provides a snapshot of the property’s condition and highlights any evident defects.

  • Budget: Consider your budget for the survey. The Level 2 HomeBuyer Report is a popular choice for many buyers as it strikes a balance between detail and cost-effectiveness, making it suitable for most conventional properties.

  • Risk Tolerance: Assess your risk tolerance as a buyer. If you prefer a comprehensive evaluation and want to be aware of any potential hidden issues, investing in a Level 3 Building Survey might be the best option for peace of mind.

  • Renovation Plans: If you have extensive renovation plans for the property, a more detailed survey would be beneficial to understand the full extent of work required and potential costs.

  • Surveyor’s Recommendation: Rely on the expertise of a qualified and experienced chartered surveyor who can visit the property and advise on the most appropriate survey based on its specific features and condition.

  • Lender’s Requirements: If you are obtaining a mortgage, your lender might have specific requirements for the type of survey they need to approve the loan. However, keep in mind that their required basic mortgage valuation is not a comprehensive survey.

Home Insurance Requirements: Some insurance providers might require a specific level of survey to ensure coverage for certain issues.

Get Help With Your Survey From Crest Chartered Surveyors

RICS surveys are an indispensable part of the UK property buying process. They offer valuable insights into a property’s condition, enabling prospective homeowners to make informed decisions and negotiate effectively. The three main levels of RICS surveys – Level 1, Level 2, and Level 3 – cater to different needs and budgets, providing varying levels of detail. When selecting a survey, consider the property’s age, size, and condition, and consult with qualified surveyors from Crest Surveyors to ensure you choose the most appropriate survey for your unique requirements. Armed with a comprehensive survey report, you can embark on your house buying journey with confidence and peace of mind. To learn more, contact one of our helpful team members today.

Should I Extend My Property Lease?

Keys with a small toy house next to them

If you own a flat or property where you are required to pay ground rent, then you’ll be in a leasehold agreement. As an owner of the property, there may come a time when you’re required to extend your property lease to avoid the risk of seeing the agreement expire. While this sounds easy in principle, the process can be costly and complicated, and the timing needs to be right to avoid extending it too late. 

So, when should you extend your property lease to avoid these uncertainties? The general rule of thumb is that you ideally need to consider extending your property lease around 80 years before the agreement is due to expire. If you leave this any later than 80 years, then you risk the cost of extending your lease dramatically increasing.

 

While there are currently ongoing discussions in Parliament to decrease these unfair costs, no law has yet been approved to protect homeowners. So, when you purchase a leasehold property, you ideally need to be aware of how long you have left on your agreement. If you’re approaching the 80-year mark on your lease, then it’s time for you to explore your options before it’s too late. To help you better understand the whole process and why it’s important, the helpful experts at Crest Chartered Surveyors in London have put together this short guide for you to explore. 

Is It a Good Idea to Extend a Lease?

As a property owner with a leasehold agreement, you may be concerned about the amount of time remaining on your contract. This is because the leasehold dictates whether or not you can live in the property. While you own the flat or the internal space, you do not own the building. Once your leasehold agreement expires, you no longer have the legal right to live on the property, so it’s important to make sure there is enough time within your agreement to cover your lifetime. 

Not only that, but the value of your property can decrease if your lease has a short time remaining. Typically, the value starts to decrease if there’s less than 80 years before it fully expires. When this starts to happen, it may also become more difficult to mortgage your property, as lenders will become concerned about the value decreasing and will factor this into their assessment. For this reason, if you are in this position, you must use a registered Chartered Surveyor to provide an accurate property valuation. 

On the other hand, if you’re looking to sell your property, this can also become more difficult if there is not sufficient time remaining on your leasehold agreement. Prospective buyers may not consider the property as good value for money if the lease does not cover the next 80 years at a minimum. So, if your agreement is less than 90 years old and you’re considering selling your property, then exploring your options for extending your leasehold is valuable for you.

When Should I Consider Extending a Leasehold Agreement?

You can only consider renewing your agreement if you’ve lived in the property for longer than 2 years, and have at least 21 years remaining before the contract expires. Alternatively, if you have owned the property for less than 2 years, you can negotiate an informal agreement with your landlord. To do this, you will need the help of both your chosen Chartered Surveyor to ensure property costs are correct, and a solicitor to navigate the informal agreements.

What Is the Leasehold Extension Process?

When it comes to extending a leasehold, you have two different options. The first is the full Statutory Lease Extension Process, which enables a homeowner to extend the lease using the Leasehold Reform Act 1993. Here, you can extend your lease by no more and no less than 90 years. 

The second option is the informal extension process. This option can be risky, but you’ll be provided with the opportunity to negotiate and agree to a deal between you and your freeholder. One downside of this option is that it’s likely that you’ll continue to pay ground rent, whereas all extensions using the Statutory option will have their ground rent removed. However, this choice can be quicker and cheaper than the formal route.

What Are the Cons of Extending a Leasehold?

As with any process, there are advantages and disadvantages to extending your leasehold agreement. These can vary depending on whether you choose to go down the formal or informal agreement route. But before we get into that, there are common disadvantages that can apply to both. These disadvantages include:

  • The process can be expensive. A landlord can request that you pay their legal fees as well as your own. 

  • There is no point in extending your lease if you already have over 90 years left on your current one, unless you want to explore your options on how to get rid of your ground rent. 

  • The process can be slow, as landlords are not currently held to strict deadlines to act to renew your lease. 

If you go down the formal Statutory route for extending your leasehold agreement, there are some cons to consider. The first is that the process does take longer compared to informal agreements, and the cost is usually higher. Your chosen solicitor should work with you to reduce the time and costs, especially as landlords have previously been known to make the process go on longer by not responding quickly. 

The informal route isn’t always the perfect choice. If you believe this method is best suited for your scenario, then it’s important to consider any new damaging clauses that can be introduced in your lease from your landlords. Your landlord may choose to do this if your lease is below the 80 year rule, making it more difficult to negotiate new terms. Similarly, your landlord is in a position to walk away from negotiations at any time. For this reason, the statutory route is always recommended if your lease is approaching 80 years until expiry.

Receive Help With Your Lease Extension Process With Crest Chartered Surveyors in London

To ensure that your lease extension process runs smoothly, it’s important that you seek the help of a professional chartered surveyor, and a solicitor. At Crest Chartered Surveyors, we’re able to provide a reliable and affordable service to assist you with your property valuations during your lease extension. We specialise in London and the surrounding counties, offering a quick, trustworthy and friendly service that supports your requests. For more information, simply get in touch with one of our helpful advisors, and we’ll be happy to help. 

Will House Prices Drop Before 2024?

new build property semi detatched

With interest and mortgage rates constantly changing, it can be extremely difficult to know whether house prices are lower or higher than usual. In this blog, Crest Surveyors clarify this by exploring whether house prices will drop before 2024 and why we may notice a change in property costs. 

So, will house prices drop before 2024? Yes, house prices are expected to drop by 2024. Generally, the housing market is slowing, with property prices falling from their peak levels. However, predictions of a dramatic price fall in housing costs are yet to materialise.  

Keep reading to find out more about UK housing prices and what reliable sources have to say about these costs. 

What Is Happening To UK House Prices?

The general consensus among banks and property websites is that house prices are now falling. Since the pandemic, house prices have begun to decrease; however, they are still very high by historical standards and have been rising much faster than wages. The average price of a UK home has nearly tripled since the turn of the century. According to Nationwide Building Society, prices have increased by more than 60% over the last ten years

On the surface, it appears that the main long-term driver has been supply and demand. A shortage of housing stock and high demand for properties has hugely affected prices. On top of this, low interest rates have also been powering the housing market for years. People used to be able to afford mortgages because they could borrow cheaply, however this has now changed because interest rates are rising. Since December 2021, the Bank of England has increased the base rate 13 times from its record low of 0.1% and now sits at 5%. This has been in response to soaring inflation. 

Below, we have collated data from various banks and housing websites to highlight how house prices are falling:

Halifax 

The Halifax house price index published on 7 June showed that average house prices fell 1% from the beginning of the year to May. This was the first annual decline in house prices since December 2012.

Rightmove 

Rightmove’s latest data showed a fall in asking prices, with the average price of UK asking prices hitting £372,812 (a fall of £82). Not only was this the first monthly drop in asking prices this year, but it is also the first drop seen in the month of June since 2017. 

Nationwide Building Society 

Nationwide’s house price index recalled that house prices had fallen by 3.4% from the beginning of the year to April 2023, the biggest annual drop since 2009. 

Zoopla 

Zoopla’s May 2023 house price index showed UK prices had fallen by 1.3% over the past 6 months. It also indicated that prices are no longer falling as quickly as they were at the end of 2022, with buyers seeming to regain some confidence.

This data shows that the average price of UK properties sold hit a record of £372,894. It also shows that house prices were 1.5% higher than they were in the same month of 2022. According to forecasts from the Office For Budget Responsibility (OBR), house prices could fall by 10% over the next two years. 

How Are Mortgage Rates Affecting House Prices?

Higher mortgage rates have made it more expensive to purchase a home. Subsequently, the housing market has taken a knock, with prices falling for four months in a row. There was more demand for property buying at the start of 2023 following a fall in mortgage rates from their October peak; however, prices have been falling ever since. 

In 2023, further rate rises are expected. This could seriously dampen the housing market because it means mortgage repayments will increase. The biggest cause of a slowdown in the housing market is most likely down to the cost of living crisis. Sadly, as household budgets come under pressure, fewer people can afford to stretch themselves to buy homes. This in turn, will discourage first-time buyers, thereby directly impacting the housing market. 

Have House Prices Already Dropped?

In March 2023, Nationwide Building Society, the timeliest source of actual house prices in the UK, recorded an -0.8% fall in house prices. This was a larger-than-predicted monthly decline. Annually, house prices are now 3.1% lower than the same time last year.

Kitchen with dining table

Are There Regional Variations In House Prices?

There are many regional variations in property prices, with specific areas seeing different levels of growth. According to Nationwide Building Society, all four nations within the UK saw a clear decline in house prices in the first three months of 2023. Here is a list of the data collected: 

  • Northern Ireland – fell by 1.3%
  • Wales – dropped by 1.7%
  • England – fell by 1.9% (East Anglia being the region with the biggest decline)
  • Scotland – suffered the biggest decline with a drop of 2.3% 

How Do Prices Differ For Different Types of Property?

The pandemic caused extreme shifts in housing preferences, with mortgage lenders continuing to see differences in price trends between property types. Prices of detached, family homes are growing much faster than flats. We think this is because many people are still working from home a few days a week and therefore require properties with more space. Figures from Nationwide Building Society show that the average price of:

  • A detached property increased by 5.9% in 2022. 
  • Flats increased by 2.1% in 2022. 

What Are The House Price Predictions For 2024?

Generally, due to high inflation and interest rates, housing prices are predicted to fall before 2024. In March 2023, the Office for Budget Responsibility (OBR), the government’s independent forecaster, predicted that house prices would fall 10% over the next two years. It argues that property transactions are expected to drop 20% over the same period, caused by the rise in mortgage rates and the squeeze on household incomes. 

RICS Property Valuations With Crest Surveyors

Our RICS property valuation at Crest Surveyors includes a visual inspection and detailed analysis of a property by RICS Registered Valuers, followed by a detailed report highlighting the findings. 

We boast of a team of highly experienced and qualified surveyors that compile impartial reports, providing you with the most accurate view of your property. We are also proud to offer our clients high-quality services that exceed the traditional valuation services. 

Get in touch with one of our experts today to find out more about our RICS property valuation services. 

What is a Ground Rent Assessment?

Sitting area with a patterned rug

In this blog, Crest Surveyors discuss ground rent and everything that it covers, from what it includes to why and when you should pay. We’ll also highlight where to find any key information you may require to understand the process better and delve into some of the newer legislation surrounding ground rent.  

So, what is a ground rent assessment? Ground rent is the rent you have to pay the freeholder or landlord of the property you own a long lease on. If the ground rent is subject to a review and the landlord and tenant are unable to agree on the new ground rent, this is where an assessment comes in. Either party has the right to make an application to RICS DRS to appoint a dispute resolver. 

Keep reading to find out more about ground rent and the difference between leasehold and freehold properties. 

What Is Ground Rent?

If you own a long lease on a property in England, Wales or Northern Ireland, there is a good chance that you’ll have to pay rent to the freeholder or landlord of the property. This is known as ground rent. In other words, ground rent is a fee charged on leasehold properties as a condition of your lease for the land your home is on. The cost of ground rent will vary depending on the type of property. It can be a fixed cost, which means it will stay the same throughout the term of the lease or it can be escalating which means it will increase by set amounts.  

Types of Ground Rent

There are two basic types of ground rent

  • Fixed ground rent – remains the same during the term of the lease period
  • Escalating ground rent – will increase during the term of the lease period

Your lease agreement must provide the following details:

  • The term of the lease
  • Type of ground rent
  • The amount you will pay
  • If it’s escalating when it will increase and by how much

Why Do You Pay Ground Rent?

If you’ve ever wondered whether you need to pay ground rent, we’ve got you covered. You are required to pay ground rent if you own your home as a leaseholder but you do not own the land on which your property sits. As of 2020, around 4.5 million households in England and Wales own their homes on a leasehold basis. Ground rent is paid annually to the freeholder of the property, which is often an investment firm, which grants you the right as the homeowner to live there on the terms of the lease. 

Before you have to pay any kind of ground rent, the freeholder has to formally ask you the following correct procedure:

  • Your name
  • The period the demand covers
  • How much you have to pay
  • The name and address of the freeholder
  • The name and address of the managing agent if payment is made to them
  • The date when payment is due

Remember – The request has to be in writing and include all of the above information, otherwise the demand could be invalid. 

What is Included in Ground Rent?

In most cases, the lease will outline exactly what is and isn’t included in the ground rent but they typically include: 

  • Any maintenance and repair of the structure of the building and any common parts (like guttering)
  • The cost of the building’s insurance and maintenance of any communal ground or private accessways
Modern apartment overlooking the tower bridge in London

How Much Ground Rent Will You Need To Pay?

The amount of ground rent you’ll need to pay will depend on the type and location of the property however, it is usually affordable. For example, ex-local authority flats will typically cost around £20 to £50 per year whereas private flats range between £150 to £600 per year. 

Interestingly, there is also something known as a ‘peppercorn’ rent where historically freeholders would ask for a peppercorn to enforce the terms of the lease and make it legally binding. The term ‘peppercorn rent’ now applies to a very low or nominal amount of ground rent. Anyone who has owned their property for two or more years can also receive a lease extension of 90 years and be entitled to a peppercorn ground rent under the Leasehold Reform, Housing and Urban Development Act 1993. Under this negotiation, the amount of ground rent will be up for discussion. 

More often than not, leaseholders pay ground rent every three to six months or once a year. 

Can Ground Rent Be Reduced?

Whilst ground rent isn’t usually reduced, you may be able to become a freeholder depending on your particular circumstances. If you live in a flat, at least half of the other leaseholders will need to buy the freehold of the building to make this possible. 

If you are instead interested in buying a share of the freehold, it is best to seek legal advice as it is such a complex process. 

Difference Between Leasehold and Freehold

Whilst differentiating between these terms can seem complicated, in fact, they both have simple meanings: 

Freehold – You own the property and the land it’s built on for as long as you want.

  • If you own a freehold property, you own the house and the land it’s built on. There are no leases to consider and you do not have to pay any ground rent or maintenance fees. This is the most common way to buy a house in the UK. 
  • If you live in a leasehold property but are wanting to buy the freehold, you can ask the landlord to see if they will sell it to you. 

Leasehold – You own the property for a set period, but not the land it’s built on.

  • Leasehold is where you buy the property but not the land it sits on. The land itself is still owned by the freeholder, who is selling the property for a set period of time. 
  • Leaseholds usually last between 125 and 999 years however, you may be able to extend how long you own it for. 
  • After you’ve owned a property for two years, it is your right to request a lease extension of up to 50 years. (Bear in mind that there may be a charge to extend your lease). 

The Ground Rent Scandal

In recent years, it’s important to mention that there has been a problem with rising ground rent costs. It would seem that freeholders have realised the potential for an additional revenue stream. This is a particular problem for new builds where increasingly high ground rents are becoming common. 

Some ground rent costs are simply already high or clauses in some leasehold contracts set the ground rent to increase (in some cases, double) over a set period. This means that the cost of ground rent can quickly reach the thousands which is a huge problem. Predictions from 2017 suggest that ground rent for some houses could reach as much as £10,000 a year by 2060. These costs impact homeowners significantly as they become trapped in contracts with ground rents spiralling out of control. 

On top of this, these homeowners then often struggle to sell their homes because conveyancing solicitors will warn their prospective buyers off buying these leasehold properties. As a result, sellers are often forced to cut the cost of the property to encourage a sale. 

According to trade body NAEA Propertymark

  • 57% of leasehold house owners didn’t understand what being a leaseholder meant until they had already purchased the property
  • 62% of leasehold homeowners feel like they were mis-sold
  • 48% of leasehold homeowners were unaware of the escalating ground rent

Unsurprisingly, all of these frustrations have led to 94% of leasehold homeowners regretting buying a leasehold. 

Tackling Rising Ground Rent Costs

In order to tackle these challenges, the government pledged to end unfair leasehold practices in December 2017. This commitment included a proposal to ban the sale of long leases on new build properties and to reduce ground rents on new leases to a peppercorn rent

Since then, there’s been a number of consultations and the government is still planning to implement changes to the law to make owning or buying a leasehold a better experience. However, this is only limited relief to those already trapped in leases which is why the government and homeowners have increasingly put pressure on developers who sold onerous leases. 

new build property semi detatched

RICS Property Valuations at Crest

Here at Crest Surveyors, we offer a visual inspection and detailed analysis of a property by RICS Registered Valuers, followed by a detailed report highlighting the findings. The purpose of this is to ascertain the property’s market value or to determine how joint assets would be shared upon sale of the property. 

Our team of highly experienced and qualified surveyors will compile impartial reports to provide you with the most accurate view of your property. 

So, get in touch with us today to find out more about our RICS property valuation services or to speak to one of our experts. 

What Is Staircasing in a Help to Buy House?

Help to Buy and Shared Ownership schemes can sometimes be over-complicated with different terminology. Staircasing is one of the terms that some people struggle with, and a lot of the rules and regulations surrounding it can be equally confusing. Luckily, once the information is broken down it becomes much easier to understand.

So what is staircasing in a Help to Buy house? In a Help to Buy scheme, staircasing is the term used for buying more shares in the property. Buying more shares means that you’ll pay less rent on the ones that you don’t own. You’ll potentially be able to reach 100% of the total shares and own the property outright.

Read on to learn more about staircasing, how many shares you can buy, whether you need a deposit, and what a Shared Ownership valuation is.

What Is Staircasing?

If you’ve purchased your home through a Help to Buy or Shared Ownership scheme, you can usually choose to buy more shares in it after you’ve lived there for a certain amount of time. This is what’s referred to as ‘staircasing’. These payments can be made either from your savings or through the help of a mortgage.

The advantage of this is that when you buy more shares, you’ll pay less rent. This is because the amount of rent that you pay will be based on the landlord’s share of the property. If you manage to staircase your way all the way up to 100%, you’ll own your home outright and won’t have to pay rent anymore.

new build property semi detatched

How Many Shares Can I Buy?

The maximum share is 100%, at which point you own the property outright. However, in some places called ‘designated protected areas’, you might only be able to buy up to 80%. These areas were set up to ensure that rural affordable housing remains in the ownership of local people. There are also Older Persons Shared Ownership (OPSO) homes where the maximum share is 75%. With this, you’ll never outright own the property, but once you reach 75% you won’t have to pay rent on the rest.

There is a minimum amount of shares that you can buy in one go. This is dependent on when you bought the property and what your contract says – so ask your landlord if you’re unsure. We’ve broken down the minimum share amount for each purchase below:

5% Or More

In the majority of cases, you’ll be able to buy shares of 10% or more at any time. In some older leases, you may only be able to buy shares of 25% or more, and in newer leases you might be able to buy shares of 5% or more. As mentioned above, all of this is dependent on when you bought the property and what you agreed to in your contract, so be sure to read that before doing anything.

 

Shares of 1%

If you purchased your home on or after the 1st April 2021, then for the first 15 years you might be able to buy shares of 1% a year. Speak to your landlord to find out if this applies to you. This only applies to shares of 1% and you’re unable to buy shares of 2%, 3%, 4%.

Before you purchase a Shared Ownership home, you should always ask the landlord for all of the important information regarding share amounts you’ll be able to buy in the future. This should be in the ‘key information document’ that will be provided before you buy the property.

Do I Need a Deposit for Staircasing?

You don’t need to wait until you can save up for a deposit so that you can mortgage more shares because you can use your existing equity in your share of the property to act as a deposit. If you do have savings then an effective way to buy an even bigger share is to combine them with the equity in your home, this will allow you to staircase faster and pay less rent in the meantime.

a desk with a laptop, paperwork and cup of coffee.

What Is a Shared Ownership Valuation?

A Help to Buy valuation is needed when buying more shares or selling a home bought via the Help to Buy scheme. The purpose of getting a valuation is to assess the market value of the property at the time, because since you initially bought the property the value is likely to have changed. There are certain conditions that need to be fulfilled when carrying out a Shared Ownership Valuation:

  • The valuation must be carried out by a Royal Institution of Chartered Surveyors (RICS) Registered Valuer.
  • The valuer must be independent of an estate agent.
  • The valuation report must be on headed paper, and must also be signed by a RICS Registered Surveyor.
  • The valuer must provide at least three comparable properties and sale prices.
  • The three comparable properties must be similar in terms of size, age, type, and must be within a 2-mile radius to the property being valued.
  • The valuer must not be in any way related or known to the client.
  • The valuer must inspect the property interior, and provide a full valuation report.

Once the valuation has been completed, you will receive a completed report. The report will include a thorough room inspection with photographic evidence, details of the properties condition and any defects. You’ll also receive details of any nearby properties that have been sold in the last 12 months and information about the location and surrounding area.

Shared Ownership Valuation With Crest Surveyors

Our helpful and experienced team of RICS qualified surveyors are ready to help you on your journey to buying or selling your property. We offer affordable service around London and the home counties, with a quick and reliable service to help you through the process.

To learn more about our Shared Ownership Valuations, simply get in touch. Or for more information on the services we have to offer, visit our website.

How Much Does a Lease Extension Cost?

If the lease on your property is starting to get low, you may want to consider getting a lease extension. Understanding how lease extensions work can be very daunting for most people because they are so complex, but there’s no need to worry! In this blog, we’ll explain how much it costs to get a lease extension and why you should consider getting one before it’s too late.  

So, how much does a lease extension cost? The cost of a lease extension is split into three parts; the premium, the freeholders ‘reasonable fees’ and your own costs. It’s therefore extremely difficult to specify exactly how much a lease extension will cost because it depends on different factors as well as an individual’s unique circumstances. 

Keep reading to find out more about the costs of a lease extension and where to find any important information you may need.  

Lease Extension Costs

With more than 4 million residential properties in the UK owned as leaseholds, it’s easy to see why so many people want to know how much it costs to extend a lease. Extending your lease is an investment in your home because it can increase the value of your property more than the cost of the lease extension itself. 

You can either pay for the cost of the lease extension out of your savings or, in most cases, your mortgage lender may be willing to extend your mortgage to pay for the lease extension. 

The cost of a lease extension is split into three parts

Front door of a fancy apartment

Part 1: The Premium 

The premium is the amount you have to pay your freeholder to extend your lease. This cost is negotiated with your freeholder as part of the process however, it is roughly based on a formula. This means that the freeholder cannot simply name their own price. The day the lease on your property drops below 80 years, you’ll be required to pay an extra cost as part of the premium – this can be very expensive. For this reason, at Crest Surveyors, we recommend that property lease extensions are carried out sooner rather than later. 

For example, for a £200,000 property with 90 years on the lease, the premium could be around £3,000. 

Remember – Freeholders will often start with very high prices, but this can always be negotiated down so no need to panic! 

It’s also important to know that calculating a lease extension premium is very challenging because it depends on various factors, such as:

  1. The value of the leased property 
  2. The duration left on the lease
  3. The annual ground rent
  4. The value of any improvements conducted by a leaseholder
  5. External factors like current rate of return on investments

As a result, we suggest that you find experienced lease extension surveyors registered with The Royal Institution of Chartered Surveyors (RICS). At Crest Surveyors, all of our  lease extension surveyors are members of the Royal Institution of Chartered Surveyors and offer years of experience and knowledge across a range of valuations. 

Part 2: Your Freeholder’s ‘Reasonable Fees’ 

Because you are obliging your freeholder to give you a lease extension, the law insists that you pay their fees. These include their valuation fee and legal fees. 

For a low-value property with a lease over the 80 year mark, this may be a few hundred pounds, whereas high-value or short-lease properties may be more. If the freeholder tries to charge too much, it is fairly easy to challenge them to keep these costs down. 

Part 3: Your Own Costs

When you carry out a lease extension, you need someone to do the legal work to ensure that you get the best deal on the premium. You’ll also want someone to do a valuation and negotiate fiercely with a freeholder. It is therefore strongly recommended that you hire a specialised lease extension solicitor and surveyor to help with these negotiations:

  • Lease extension premium 
  • Marriage value – a leasehold’s marriage value is calculated by taking the amount the leasehold increases in value following the extension and splitting it in two.
  • Land registry fees
  • Freeholder’s legal and valuation costs
  • Leaseholders legal and valuation costs 

In some cases, you might need to apply to a tribunal to get them to decide how much your premium should be. This does cost more but it is fairly unusual because freeholders are required to pay too. 

Front door of a home

Leasehold property explained

In the UK, there are two ways property is normally owned. These include:

  • Leasehold

This type of property is held by a lesse, who has bought the right to use it exclusively for a certain period of time from a freeholder. 

  • Freehold

This type of property is held directly and unconditionally from the crown. 

The defined duration in which a leaseholder has an interest in a property is known as the term of the lease. This can be anything from 999 years, though normally it is less and is often set at 125 years. 

When Can You Extend a Lease?

Lease extension is possible in the UK due to the legislation brought in as part of the 1993 Leasehold Reform and Urban Development Act. A leaseholder is considered eligible for lease extension after they have leased the property for two years or more. 

Following the act, if a property’s original lease term was longer than 21 years, it is legally considered a long lease. The lease can be unilaterally extended by an eligible leaseholder in exchange for a payment to the freeholder.

This means that an eligible leaseholder does not need the freeholder’s permission to have their lease extended.

When Should You Extend a Lease?

If you can afford to, it is a good idea to extend your lease when there are just 60 years or less left on it. This is because it will increase the property’s resale value. If you can, you should try and extend your lease well before this point. 

If things go well, extending a lease can take between three months and a year so make sure that you start extending your lease well before the 80 year mark. 

How Much Can You Extend a Lease By?

Eligible leaseholders are entitled to buy a lease extension of:

  • 90 years if they own a flat
  • 50 years if they own a house

Currently, this is the only amount lease can be extended by, however changes are being planned to allow homeowners to buy up to a maximum 990-year extension. 

Why Should You Extend a Lease?

Extending your lease is a great idea because it:

  •  Increases your property’s value
  • Gives you the certainty of being able to stay in the property for the long term
  • Makes a property easier to sell
  • Reduce your ground-rent to £0

Why Choose Crest Chartered Surveyors For Your Property Lease Extensions?

If you’re looking to begin the process of extending a lease, our experienced lease extension surveyors will conduct a professional lease extension valuation on your property before negotiating a lease extension agreement with your freeholder. Here at Crest Surveyors, we know how daunting the lease extension process can be. That’s where our trained, knowledgeable surveyors come in. 

Here are some reasons why you should choose Crest:

  • 100% success rate on property lease extensions
  • Low premiums on lease extensions
  • All of our lease extension surveyors are members of the Royal Institution of Chartered Surveyors (RICS)
  • We provide the quickest and most cost-effective solutions for your individual needs
RICS surveyors logo

Property Lease Extensions with Crest Chartered Surveyors

Now that you know everything there is to lease extensions, from costs to benefits, take a look at Crest Surveyors property Lease Extensions.

Here at Crest, we believe that lease extensions are one of the best investments you can make on your property. If you want to increase the value of your property whilst making it easier to sell in the future, you may want to consider getting a property lease extension.  

Get in touch with our experienced lease extension surveyors by filling in this form or give us a call on 020 3940 1118 to make a booking.  

Can a House be Sold for Less Than Probate Value?

house with for sale sign

 

If you’ve recently lost a loved one, you may be dealing with a number of confusing legal and financial situations. One such situation may be the valuation and selling of their property. In this blog we aim to lessen the confusion and provide you with everything you need to know about probate and what happens if you sell the property for more or less than probate value. We’ll also explain whether or not you need probate in the first place.

So, can a house be sold for less than probate value? Yes, a house can be sold for less than probate value. In these circumstances, a refund in any overpayments of inheritance tax may be granted. If a house is sold for more than probate value, HMRC may get involved and issue higher inheritance taxes or capital gains tax.

Read on to learn more about  valuing a house for probate and what happens if a property is sold for more or less than probative value.

 

What happens if a house sells for less than probate value?

Properties sold for less than their probative value may be entitled to a refund in any inheritance tax overpayment. However, this is not guaranteed and can only be claimed if the property is sold within four years of the deceased’s passing. 

Currently, if a property is passed on to a direct descendant or a spouse (a child or grandchild), a nil-rate band applies. This means that inheritance up to the value of £500,000 can be passed down tax-free, or £1 million for a married couple. An additional residence nil-rate band may also apply to protect the family home from inheritance tax, up to £175,000.

 

What happens if you undervalue a property for probate?

If a property is undervalued for probate, HMRC can impose penalties and additional tax liabilities. It is important to ensure that probate valuations are reported accurately as any discrepancies are likely to be investigated.

If a professional valuer was used to determine probate value, the estate’s representatives or family will be protected from liability from such penalties. However, for the valuer, there are different levels of penalties depending on the inaccuracies of reporting:

 

    • If the error is due to lack of reasonable care, the penalty will be between 0% and 30% of the extra tax due;

    • If the error is deliberate, the penalty will be between 20% and 70% of the extra tax due;

    • If the error is deliberate and concealed, the penalty will be between 30% and 100% of the extra tax due.

 

What happens if you sell a property for more than probate value?

If, for whatever reason, the final sale price is higher than probate value the following can occur:

 

    • HMRC may increase the inheritance tax owed. This can be challenged via the District Valuer, but is often a time-consuming and stressful process.

 

Can a house be sold without probate?

You cannot sell a house without probate. You have no legal authorisation to sell a property until probate is granted, unless your name is already on the title deeds; for example, in the case of a spouse.

You can go ahead and put the property up for sale and even accept offers before probate is granted, however, you cannot complete the sale until you receive probate. 

Doing so may create a range of financial issues in relation to inheritance tax, probate fees, maintenance costs and more, all of which can be reclaimed from the cost of the estate upon sale.

 

What’s the difference between probate value and market value?

Generally speaking, probate value is the value of an estate as determined by HMRC guidelines. It typically includes everything the person owned at the time of their death, minus any debts owed. This will usually include their property(ies). Market value is the value that an asset may expect to sell for on the open market, i.e. by an estate agent. 

Learn more about this in our detailed blog, What is the difference between market value and probate value?, where we go into more detail about each type of valuation and when they should be used.

 

How to arrange a probate valuation

It’s best to contact a specialist probate surveyor to ensure that the correct value of the property is determined. At Crest Surveyors, we understand that every property is different and unique. Calculating someone’s assets for probate may be confusing and overwhelming, especially if the property they owned is a large estate, a grade listed building, if they owned a business property alongside their commercial property, or more.

To help you during this difficult process, Crest Surveyors are here to provide a thorough ‘Red Book’ valuation. This is a more formal and in-depth valuation that provides photographic evidence, a thorough written report, and a valuation that is as accurate as possible.

Get in touch today for more information or to arrange a valuation.

 

FAQs

How does probate work?

In relation to properties, a RICS chartered surveyor will calculate the value of the property in question to determine its market value – what it might reasonably sell for on the open market. Other areas of the deceased’s estate may require other specialist valuation methods. 

How long does probate take?

A probate valuation will usually take anywhere from 30 minutes to a couple of hours, depending on the size of the property and any particularities associated with the property. Crest Chartered Surveyors aims to deliver all valuation reports within 6 working days of valuation.

Do you need probate if there is a will?

You will need to apply for a Grant of Probate if you are an Executor named in the deceased’s will. This process ensures that Executors are the right people to deal with the deceased’s estate and  provides them with the legal right to deal with assets such as property, bank accounts and shares.