Do I Need Searches When Buying a House for Cash?
Yes, even cash buyers should conduct property searches before purchasing a home. These searches provide essential information about the property's condition, potential risks, and surrounding environment.
They're not a legal requirement if you're not getting a mortgage, but we would never recommend buying a property without them.
Choosing not to get searches based on saving time and money could leave you financially and legally exposed. When you compare the cost of a search bundle at £295 INC VAT to the average price of a property in England and Wales at £301,172 (July 2024) the benefits outweigh the negatives.
Mortgage lenders won't lend their money without evidence that certain properties and searches have been obtained, so why would you want to risk your own money by buying without property searches?
What are property searches?
Property searches are a series of investigations to discover potential issues or concerns related to a property. These main searches typically include:
Local Authority Search
Provides information about planning applications, environmental issues, and other matters related to the property and its surroundings.
For example, local authority searches might flag that the property's loft conversion was built without planning permission or building control sign-off. This might mean you can negotiate with the seller to pay for retrospective sign-off on the conversion.
Water and Drainage Search
Reveals potential water or drainage problems in the local area, such as flooding risks or contamination. It might highlight that the property is not correctly attached to the local water company's sewer network, meaning that work needs to be carried out to fix it.
Environmental Search
Identifies potential environmental risks or hazards, such as contaminated land or nearby industrial sites. Environmental searches might flag that the property has been built in an area prone to river flooding, making insurance expensive or harder to get.
Chancel Repair Search
Determines if the legal owner of the property is liable for contributing to the upkeep of a local church. This means that you could face a demand for payment to help repair and maintain a church's roof.
Coal Mining Search
Reveals all past, present, and possible coal mining activity in the surrounding areas of the property.
Are searches a legal requirement?
No, local searches are only a requirement if buying with a mortgage. Lenders will insist on certain searches being made as a condition of their mortgage offer.
Our solicitors will recommend the best/necessary searches for the property to give you the best position for purchase and negotiation.
If you already have another solicitor, we can help you speed things along by getting your searches ordered today.
Discounted Bundle of Searches
Order the most common searches required for purchasing a property at a discounted price.
Why do cash buyers avoid searches?
To save time:
You could save some time with certain local authorities, but the majority of local councils send their search results back within 10 working days. Not getting searches means you'd be taking a risk with no actual speed benefit.To save money:
It can cost considerably more than the search itself to fix the problems that a Local Authority Search or Drainage Search could flag.
Can you buy searches from a previous buyer?
Another way to save time and money is by purchasing search reports and results from a previous buyer.
However, the risk you face with this is outdated information. Searches usually remain valid for six months, but you should not assume that the search results are useful for this long. Some searches might contain invalid information the day after they are done.
The risks of not conducting local authority searches
Even cash buyers can encounter unexpected problems after purchasing a property. Searches can help identify potential issues before it's too late.
There are two types of consequences if you choose to ignore property searches before your cash purchase:
Legal consequences
Suing for breach of contract:
Cash buyers may not have mortgage lender protections, but they can still sue the seller for breach of contract if undisclosed defects are discovered. This could lead to legal fees, court costs, and potential damages.Restrictions and covenants:
For example, a seller might fail to disclose that the property is subject to planning restrictions such as a covenant preventing extensions. If this was not caught in a search before purchase, it could lead to a breach of contract claim and extensive court proceedings.Regulatory action:
In some cases, properties with undisclosed defects may be subject to regulatory action. Even cash buyers could face fines, restrictions on the property's use, or even demolition if they are found to violate regulations. A Local Authority Search aims to solve this before a property purchase.Environmental hazards:
If a property is on contaminated land or poses an environmental hazard after the purchase, the buyer may be liable for clean-up costs and potential fines. An environmental Search could avoid this.Development concerns:
Contaminated land may also have restrictions in place which can affect future development plans.HMO restrictions:
Buy-to-let investors should be aware of any local authority restrictions on HMOs (house in multiple occupations) as these can impact the property's rental income and value.Liable for charges:
For example, when a property has received a disability grant, the local authority might place a charge on the property to secure repayment of the grant. This leaves the buy-to-let investor liable.
Financial consequences
Property value reduction:
Undisclosed defects can significantly reduce the property's value. This can be particularly problematic for cash buyers who may need to sell the property in the future, as they may not recoup their initial investment.Difficulties with a future sale:
While you might be able to sell to another cash buyer in the future, there is a much higher likelihood that the next buyer will use a mortgage lender and carry out searches as part of their offer.Future repairs:
Discovering defects after purchase can lead to expensive repairs or renovations. These costs can quickly outweigh any savings from purchasing the property with cash.Poorly executed works:
You might find that a poorly executed loft conversion leads to structural problems such as sagging floors or weakened walls, requiring extensive repair work or even demolition and rebuilding.Additional maintenance:
Properties located on unadopted roads or with driveways without dropped kerbs might also require additional maintenance and could be less desirable to tenants, another consideration for buy-to-let cash buyers who might want to save money on searches.Insurance worries:
Insurance companies may charge higher premiums for properties with known defects or risks. This can add to the ongoing costs of ownership.Water damage:
An insurance company will be reluctant to cover damage caused by water damage if the buyer was aware of the risk but failed to take appropriate measures such as a Water and Drainage Search.
How much do searches cost?
We offer a conveyancing search pack for £295 INC VAT. We can also provide you with any additional searches you may need.
Commons Registration£89 INC VAT | Drainage and Water£106 INC VAT | Highway Search£149 INC VAT |
Planning Report£72 INC VAT | Local Authority£215 INC VAT | Energy & Infrastructure£42 INC VAT |
Climate Risk Report£30 INC VAT | Environmental Appraisal£360 INC VAT | Environmental Report£69 INC VAT |
Flood Appraisal£264 INC VAT | Flood Risk£64 INC VAT | Coal Mining£66 INC VAT |
Subsidence£45 INC VAT | Chancel£42 INC VAT | Radon£42 INC VAT |
How long do searches take?
Typical turnaround times
- Commons Registration - ETA dependent on Local Authority.
- Water and Drainage - 10-14 working days.
- Highway - ETA dependent on Local Authority.
- Planning Report - 2 hours.*
- Local Authority - 1-8 weeks.
- Energy & Infrastructure - 2 hours.*
- Climate Risk - 1 working day.*
- Environmental Appraisal - 10-20 working days.*
- Environmental Search - 2 hours.*
- Flood Appraisal - 10-20 working days.*
- Coal Mining - 2 hours.*
- Subsidence - 2 hours.*
- Chancel - 2 hours.*
- Radon - 2 hours.*
Potential delays
This depends on whether or not the conveyancing searches reveal any potential risks. If that is the case, you can try to renegotiate the price with the seller.
If, however, you are satisfied with the search results, you can move on to exchange contracts. You can expect this to be done within 1-3 weeks after getting your conveyancing searches back. Our team will help you throughout the entire process.
SAM's Top Tip
You could try to save money by ordering your searches directly from your local authority. Some councils offer cheaper local searches that can be found through online companies.
Check with your local authority and see if searches are cheaper with them, but if you find they're more expensive, come back to use to order your searches and take advantage of our fixed fees.
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