On Thursday 5 November the Bank of England raised interest rates for the first time in more than three years, taking Bank Rate from 3.75% to 4%. The Monetary Policy Committee voted 8–1 for the rise, and the one member who disagreed wanted a bigger increase, to 4.25%.
The reason is inflation. Higher energy costs linked to the conflict in the Middle East pushed inflation up to 3.5% in September, and the Bank expects it to rise further next year. Governor Andrew Bailey said another rise may follow if those pressures don't ease, but was clear that this isn't the start of a long run of increases. The next decision is on 17 December.
What does the rate rise mean if you're buying a home?
Many lenders had already priced the rise in, so mortgage rates may not jump overnight. The Bank noted that two-year fixed rates had already risen by nearly half a percentage point since September. The bigger change is in confidence. Buyers have less room in their budgets, lenders tend to be more careful with their valuations, and an unexpected repair bill after you move in hurts a lot more when your monthly payments have just gone up.
That's why a survey matters more now than it did a year ago. Bear in mind that the lender's mortgage valuation is carried out for the lender, not for you, and tells you very little about the condition of the property.
Which survey do you need?
For most modern homes of standard construction in reasonable condition, an RICS Home Survey Level 2 (formerly the HomeBuyer Report) is the right choice. It gives clear condition ratings and highlights anything that needs attention before you commit.
For older or larger homes, listed buildings, properties that have been extended or altered, or anything of unusual construction, we recommend an RICS Home Survey Level 3 (formerly the Building Survey). It is the most thorough pre-purchase inspection available, and it looks at what is causing any defects and what it will take to put them right. Our recent pieces on roof defects and listed buildings give a good idea of what we look for.
If you're not sure which you need, give us a call and we'll talk it through based on the property you're buying.
Are you paying the right price?
When rates rise, asking prices don't always keep up. An independent RICS valuation from one of our Registered Valuers tells you what the property is actually worth, and it can be added to a Level 2 or Level 3 survey so that one visit covers both condition and value. A valuation is also useful if you've been hit by a down valuation, are planning to remortgage, or need a Red Book valuation for probate.
A quieter market also gives buyers more room to negotiate. A report that sets out defects with photographs and condition ratings gives you something concrete to take back to the seller, whether that leads to a price reduction or an agreement to carry out the work before completion.
Common questions
Do I still need a survey if my lender has done a valuation?
Yes. The lender's valuation only confirms that the property is suitable security for the mortgage. It isn't a detailed inspection and it isn't written for you.
Should I wait for rates to come down before buying?
Nobody can say for certain where rates go next, so that's a decision for you and your mortgage adviser. Whenever you buy, a survey and valuation mean you do so knowing what you're getting and what it's worth.
How quickly will I get my report?
We usually email reports within three working days of the inspection. Larger or more complex properties can take a little longer, and we'll keep you updated.
Speak to Navah Consulting
We're RICS-regulated Chartered Building Surveyors based in Bishop's Stortford, on the Hertfordshire–Essex border. We carry out surveys and valuations across Hertfordshire, Essex, London, Cambridgeshire and parts of Suffolk. Our reports are written in plain English, include plenty of photos and are usually with you within three working days of the inspection, which is a big part of why more than 200 clients have left us five-star reviews on Google.
If you're buying in the months ahead, call us on 01279 755486 or send the property address and agreed price through our contact form, and we'll recommend the right survey for you.
