18 August 2020
When buying a new home your conveyancing solicitor will carry out, what are known as ‘searches’ to find out vital information on the property and any associated risks, before you exchange contracts with the seller.
Searches are not always compulsory however are strongly advisable as they can reveal issues with the property that may affect its future value, resale opportunities or your everyday enjoyment of the property.
If you are taking out a mortgage to purchase a property then your mortgage lender will request certain searches are carried out before they agree to release the mortgage funds. This is because until the point that you have fully repaid the mortgage, the lender also owns the property. Should you default on future payments the lender will be forced to repossess and sell the property on, they will therefore need to know that there are no issues attached to the property.
If you’re a cash buyer you don’t have to legally take out any searches on the property, however it is strongly advisable that you pay for the searches recommended by your solicitor. The searches can reveal information about the property which may end up costing you thousands to repair in the future.
The type of searches that you need depend largely on the location of your property, there are however three main types of searches that are advisable for all properties, including:
Local Authority searches which identify potential issues with:
o Planning
o Pollution
o Highways
o Building control
Environmental searches which identify potential issues with:
o Flooding
o Subsidence
o Landslides
o Land contamination
Water and drainage searches are conducted by the local water company and identify the following:
o If the property is connected to a public water supply and sewer.
o Who owns and is responsible for the maintenance of the sewers, drains and piping.
o Where the public sewer and drainage pipes are located.
o If the water supply is metered or rateable.
o If you will need permission from the water company to extend the property.
Other searches that you may need to take out, depending on the location of the property include:
• Flood risk report – If the property is built in a flood risk area.
• Mining searches – If the property is built in an area with coal deposits.
• Planning searches – This can be conducted to find out if your neighbours have planning permission for large extensions or if there is plans in place to build a new supermarket nearby etc.
• Chancel repair liability – If you live within a parish church council you could be liable to contribute towards the costs of repairing the local parish church.
Property searches can reveal essential information that may influence your decision to continue with the purchase, before the contracts are exchanged with the seller. The searches can reveal issues such as:
• The property has been built on former industrial land and could be potentially contaminated with arsenic, asbestos, solvents or gases which could harm your health, or pollute the water supply.
• The property is built on land that regularly floods, meaning that it is difficult to insure the property.
• There are plans for a new road, railway line, wind farm or housing estate nearby which could affect the price that you will pay for the property.
• The property may have debt attached to it which you will be liable for, if you purchase the home before the current owners have rectified the debt.
Ultimately, without having the searches completed you could end up buying a property which is difficult to sell on, impossible to insure and is likely to leave you with negative equity.
Property searches will be organised by your instructed solicitor as soon as your offer on the property has been formally accepted and you have paid the deposit to the solicitor.
The costs of Local Authority searches are determined by the individual council, they can vary from as low as £30 to as much as £250.
It is however common practice for your solicitor to offer you a ‘search pack’ which covers the four main report criteria: Local Authority, Drainage and Water, Environmental and Mining. This will cost around £200-260 all inclusive.
The turnaround for Local Authority Searches can be as quick as 48 hours to as long as six weeks. The factors affecting the time difference are largely due to staffing levels and demand in each different local authority. The way in which local authorities return search results can also have an impact on the time frame, results returned electronically via email or an online portal, are generally quicker than by post.
In summary it is important to do as much due diligence as possible when purchasing a property, to avoid making a poor investment. Having the appropriate searches conducted will reveal any risks associated with the property, which may influence your decision to proceed with the purchase. If risks associated with the property that can be resolved are revealed, you could ask the seller to fix the issues prior to the completion date or renegotiate on the asking price.
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