19 Things to Look For When Buying a House

There are a great many things to look out for when buying a house, flat or apartment. Missing some of them could cost you serious money, inconvenience or distress.

Finding and buying a new place to live is often fun and exciting.

But that should not blind you to the many issues, risks, dangers and pitfalls you may face.

This blog reveals the 19 most important things you should look out for, consider and action when buying a new home:

1. Should you buy new or second-hand?
2. Should you buy a house or a flat?
3. Is it okay to buy a leasehold title?
4. Let the buyer beware
5. The dangers of buying a rundown property
6. Be wary of shared facilities
7. Think twice about irregular layouts 
8. Will you be able to manage the garden?
9. Will the basement or cellar be a problem?
10. Is the lease too short?
11. Can you afford the service or maintenance charges?
12. Are you buying something too big?
13. Are you paying too much?
14. Studio flats may be hard to sell on
15. A conveyancing chain presents risks
16. Flats above shops, offices or restaurants
17. The downsides of listed buildings
18. The drawbacks of buying in high rise buildings
19. Checking the surrounding area
Conclusion

1. Should you buy new or second-hand?

Deciding whether to buy a new or second-hand home, assuming you have the choice, is something fundamental you should decide on before you start looking for your new home.

New properties have the advantage of being bright, new and extremely attractive.

But they often come with a “builder’s premium” – meaning that they are significantly more expensive than equivalent second hand properties nearby.

For that reason, it is often believed that new properties are a bit like a new car; they depreciate in a value after purchase.

Of course, in time, they will increase in value, but if you need to sell a few years after purchasing, you may not get the price you expect.

Second-hand properties also have their drawbacks. If the property is in a poor or average condition, you may face high future costs for maintenance and repairs.

building-condo-condominium-36366.jpg

2. Should you buy a house or a flat?

One of the most basic considerations when buying a home is whether to buy a house or a flat.

All things being equal, a house is usually more expensive than a flat.

A house will normally have the advantage of being bigger in size, with more rooms and facilities such as outside space or gardens.

If the house is detached or semi-detached it will have a high level of privacy, and even a terraced house will offer more privacy than a typical flat.

Flats, especially older conversions, can suffer from issues of noise. Whenever you are buying a flat, it is highly recommended to view when your neighbours are in, so that you can judge the noise levels.

Ask your conveyancer to raise detailed and specific questions about noise and neighbour disputes when they send “pre-contract enquiries” to the seller’s conveyancer before the purchase is contractually agreed. 

3. Is it okay to buy a leasehold title?

Where you are buying a house, you will usually get a freehold title. When buying a flat, you will normally get a leasehold title.

However some new houses are offered with a leasehold title and there are also some Victorian houses, especially in the north of England, which are leasehold.

A freehold is the better legal title as it allows you and subsequent owners to use and enjoy the property “in perpetuity” – for all time.

That means you can bequeath your property to your children and others.

With a leasehold title you are only entitled to use and enjoy the property for the duration or term of the lease,  often 99, 125 or 150 years in length on creation.

As years of the lease expire, it becomes less desirable, marketable or valuable – which means that you, or a subsequent owner, may need to pay a substantial  premium to the freeholder to extend it back up to an acceptable length. 

With a freehold, you don’t have to pay ground rent or maintenance charges and you are free to do what you want with the property, within the law. For instance, you can build on spare land, convert your property into more than one unit or change its use.

If you have a leasehold legal title, you will normally have to pay an annual ground rent and maintenance charge to a freeholder or managing agent.

You will be subject to the covenants and regulations in your lease and will usually need permission, and have to pay fees or charges, if you want to carry out certain building works in relation to your property.

For some specific issues to consider when buying a freehold house, read this blog:  Dangers When Buying a Leasehold House

4. Let the buyer beware

A key principle when a property is being bought is “caveat emptor” or “let the buyer beware”.

As a buyer, once you exchange contracts to buy, you will not be able to seek redress for any problem with its state or condition which comes to light after you  buy.

That means it is for you to find out any defects, issues or problems with the property in advance of buying.

It is therefore vital for you to arrange a survey before you buy, even if you are a cash buyer.

The poorer the condition of the property you are buying, the more detailed a survey you should require.

The Royal Institution of Chartered Surveyors (RICS) offers 3 levels of survey.

You can find details of the various types of RICS surveys and when each is suitable here

abandoned-architecture-balcony-366282.jpg

5. The dangers of buying a rundown property

You need to be careful when thinking about buying a rundown property. Yes, you may be able to secure a bargain price, but there are several traps  you must avoid falling into. 

Firstly, be aware that if a property is being bought as a regular home, it will not be mortgageable if it does not have a working kitchen or bathroom.

Similarly, some lenders will not lend if the property has two kitchens or is configured as two or more residential units.

Also, you need to be accurate with the cost of works you anticipate. If you underestimate the total, you will end up paying more than you should for the property – reducing your anticipated gain.

Further, it is particularly important to obtain a full survey of the property to identify structural problems or issues with things like the electrics, damp and dry rot – all of which will not be readily identifiable to an untrained eye.

A “building survey” is the most comprehensive report provided by RICS and is advisable when a property is in a poor state of repair and will require substantial refurbishment works following purchase.

6. Be wary of shared facilities

You should be cautious if buying a property with facilities or services shared with neighbours.

That will usually be the case when you are buying a flat, where you will typically find shared entrances, communal areas and outside space.

Shared facilities  are less common with houses – but you can have things such as shared driveways, pathways, frontages or parking.

Carefully consider all shared facilities in advance of buying. Ask yourself if the arrangements are workable and are likely to cause issues or disputes going forward.

In the case of shared entrances, is the entrance safe and secure? In the case of parking, is the parking area large enough for the number of vehicles with parking rights – taking account of the size of your vehicle?

In the case of freehold houses with shared facilities, you should check the arrangements for maintenance and repairs and ask for details of previous expenditure and costs.

It is absolutely vital to raise with your conveyancer any questions or comments you have, so that they can put them to the seller, so that you know the exact position before you buy.

7. Think twice about irregular layouts

You should be wary about buying a property with an irregular layout. A common situation is a house with a downstairs bathroom.

Similarly, there may be a bedroom which can only be accessed from another bedroom.

Matters such as these will put off many subsequent buyers and so may make your property less marketable and less valuable on a later sale.

Of course, you may have plans to correct the irregular layout but, if so, you should carefully calculate the cost of doing so – agreeing a price which takes the cost of anticipated works into account.

backyard-bench-daylight-210531.jpg

8. Will you be able to manage the garden?

Especially if the garden area is large, you should give consideration to whether it is something you will be able to conveniently manage once you buy.

A large garden may seem attractive and highly desirable at first sight.

However, especially if you have not owned a garden before, it is easy to underestimate the amount of time and effort it takes to keep it under control, particularly in the spring and summer months.

If you don’t adequately manage your garden, you can in the long run have issues with trees – which can adversely affect the foundations of  your house, or cause issues or disputes with your neighbours.

Failure to maintain fences, hedges, bushes and climbing plants can also lead to problems.

If you are thinking about hiring someone to help with your garden, find out the availability and likely cost of local help – so that you can accurately calculate affordability.

9. Will the basement or cellar be a problem?

If you are buying a property with a basement or cellar, consider whether it is likely to be a problem going forward.

Is the basement or cellar fully watertight and in good condition? Has it been professionally tanked out and does it come with a valid guarantee?

Ask the seller whether there has been any history of flooding and whether there has been any issue with insurance claims.

If you will need to make the basement or cellar watertight after you buy, be sure to obtain two or three estimates before exchange of contracts – and see if you can secure a price reduction to take account of the cost of works you will need to carry out.

10. Is the lease too short?

If you are buying a property with a leasehold title, check whether the lease is “too short”.

Leases lose their value as they reduce in length over time. On the plus side, you will have a statutory right to extend your lease, and you can also extend it by agreement with the freeholder.

However, once a lease expires to 80 years or less, it becomes significantly more expensive to extend.

Therefore, if the lease you are buying is close to the 80 year mark, you should be alert to the need to extend it before it reaches that point.

Further, before buying, you should  consult a surveyor as to the possible premium and charges if you seek to extend the lease (a) before the 80 mark and (b) after the 80 year mark.

By doing that, you will be better able to judge the correct price to pay when you buy. 

If the lease you are looking at is “very short” (70 years or less), you may have difficulties in finding a mortgage or a mortgage offering the best rates.

There will be lenders prepared to lend against very short leases. However, the shorter the lease, the more difficult and expensive it will be for you to extend it.

If you are buying a very short lease, you should ask the seller to get a written estimate from the freeholder as to how much it will cost you to extend the lease to the length you wish – for instance, 150 years.

c-clamp-cash-close-up-46242.jpg

11. Can you afford the service or maintenance charges?

When you are buying a leasehold property, carefully assess the matter of service charges before buying.

With a leasehold, the freeholder will usually insure and maintain the building and common areas, but you as the leaseholder will be responsible for meeting the cost or charges for doing so.

With a newly built property, the cost may be relatively modest – but with an older property, requiring significant ongoing works, the cost may be high and prohibitive.

The range of services available to you – things like gyms, play areas and gardens – may seem super attractive. However, you should carefully consider the likely cost and whether you will actually use the services or derive any benefit from them.

In effect you need to conduct a cost-benefit analysis. Having regard to the expected cost of services, will you derive sufficient benefit or gain?

Your conveyancer will normally request full details of recent repairs, maintenance and service charges before you sign contracts. On receipt of such information, study it with care and raise any questions with your conveyancer.

In particular, you should be clear as to the likely monthly cost of service charges going forward.

Don’t just take account of the current level of service charges; consider whether they are rising, and assess where you think they will be in a few years’ time, when you may want to sell the property.

High service charges can put off many buyers and can significantly depress property values. 

12. Are you buying something too big?

Just because you can afford to buy a two bedroom property rather than a one bedroom property, does not mean that you should do so.

If you don’t need two bedrooms, think twice about buying them. Will you actually use the extra space? Will you be able to afford the extra running costs in terms of things like extra heating and council tax?

However, there is one very good reason for buying an extra bedroom.

You may be able to rent it out to a lodger, getting in extra income, which you can use to reduce your mortgage or running costs.

13. Are you paying too much?

It is important not to be an over-motivated buyer when buying a property.

If you are too keen on a property, your sense of objectivity may go out of the window, and you can end up buying at too high a price 

That is especially the case when the property market is good and prices are rising fast, with strong competition among buyers.

Paying too much now will probably lose you money when you come to sell, especially if you have to sell in the short-term. 

It is good sense to view a property at least twice before agreeing to buy.

If you have any reservations or concerns about the price, carry out  a thorough online research, looking at comparable local properties and the prices they have sold for in recent times, as well as current asking prices.

When in doubt, take a second or third opinion from someone in the know before going ahead.

Be especially careful when buying a newly built property.

There is a tendency for developers to push up prices to meet their profit targets, and it is very easy to agree a developer’s price uncritically – especially when the property looks amazing and is exactly what you want. 

You should be even more careful when buying a property off plan: agreeing a price now when it may be a year or more before the property is built.

If the property when built is less than the amount you have contracted to pay for it, you will nevertheless be obliged to go ahead.

Find out more about the dangers of buying off plan by reading this blog: Buying off-plan – a risky strategy

14. Studio flats may be hard to sell on

You should be cautious about buying a studio flat. Some lenders will not lend on them and buyer demand for them is not always strong.

You may find that they are difficult to sell when you come to sell, forcing you to reduce your asking price.

Perhaps a studio flat is all you can afford on your budget. However, if that is the case, remember that there are alternatives you can consider such as:

– Buying a shared ownership property (where you can buy from just 25% of the full value)

– Buying with someone else on a joint ownership basis (enabling you to share the deposit, mortgage and running costs).

boat-chain-dawn-119562.jpg

15. A conveyancing chain presents risks

A conveyancing chain is when you are buying a property and you or your seller has a related transaction.

If you are a first-time buyer, you will not have a property to sell, but the sale to you may be dependent on your seller’s transaction. If that does not go ahead, the sale to you is likely to fall through.

An aborted purchase is bad news for you – as it is likely to lead to lost time and wasted legal, survey and mortgage costs.

All things being equal, you should prefer a no-chain situation to one where there is a chain.

Of course, if you have a property to sell, you will not be able to avoid a chain. However, you can reduce the risk if you can find a property to buy where there is no chain on the part of your seller. 

About one in four purchases will fail to go through; by avoiding a chain where possible, you will minimise the risk that your purchase will abort.

16. Flats above shops, offices or restaurants

The number of mortgages available to you will be reduced if you want to buy a non-purpose built flat above shops, offices, restaurants or other commercial premises.

There are fewer lenders willing to lend on such properties, because demand for them is not as high as regular flats

You should bear this in mind if you decide to buy such a flat – even if you are getting a good bargain. When you come to sell, you may find it difficult to find buyers, or you may need to take a price cut.

That is especially true when there has been a property crash or the market is weak.

When the property market is not strong, less desirable properties are more difficult to sell.

If you are buying new-build flats above commercial premises, these negatives will not normally apply.

17. The downsides of listed buildings

A listed building is typically very attractive, historic and highly sought after by buyers able to afford them.

However, buying a listed building does come with a number of downsides which you should not ignore.

Firstly the number of lenders willing to lend on listed buildings is not as high as regular properties.

Secondly, the cost of keeping them in repair or making modifications or changes will be relatively high and could be prohibitive. In addition, you will need listed building consent prior to making most changes to the interior as well as the exterior.

Thirdly, listed buildings are usually more expensive to insure than mainstream buildings.

18. The drawbacks of buying in high rise buildings

You should do your homework before choosing to buy a flat in a high rise building or tower block.

Fewer lenders are willing to lend against flats in such buildings, especially if they are council or ex-council owned.

Lenders may be unwilling to lend if “too many” flats are still owned by the council, there are design or fire safety concerns or there are issues around services of facilities, such as lifts.

You may be able to get a relative bargain buying in a high rise building, especially one owned by a council or a housing association. However, you should be mindful of the challenges you may face if you need a mortgage to buy.

If you don’t need a mortgage, you should take account of the issues which non-cash buyers may have to overcome when it’s time for you to sell.   

19. Checking the surrounding area

It is extremely important to carry out thorough due diligence in relation to the surrounding area or neighbourhood before making your final decision to buy.

When your conveyancer carries out pre-contract searches and enquiries, they will investigate and report to you on matters such as planned roads and developments.

However, you will need to carry out your own checks for matters which may be important to you, things such as: schools, GP surgeries, hospitals, transportation, supermarkets and other services and facilities.

You may also want to check out the local crime rate and issues of noise or anti-social behaviour.

No matter how great your property, the neighbourhood, if problematic, can have an adverse impact on its saleability and value. 

Conclusion

When buying a home, there are a whole range of factors, considerations and issues to take into account. Avoid the temptation to just focus on the price or how much you like the property.

Consider all the matters mentioned in this blog if you really want to buy a property which is a great buy, and also fully meets your personal needs and requirements.

If you have not signed up to get my latest blogs sent to you weekly, please do so HERE

Dalton Barrett
Rebel Property Coach

Please follow me on Twitter @Dalton1London
You can find me on FacebookInstagram and on YouTube
Please link up with me at LinkedIn

My website is: www.rebelpropertycoach.com


ADVERTISEMENTS
Advertisements

Leave a Reply

Your email address will not be published.