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| Buying Tips |
For most people, buying your home will be the biggest purchase you make in your life. It is therefore important to understand what you are doing to be able to make informed decisions with as much knowledge as you are able to gather. |
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Be Organised |
| To ensure that your property purchase runs as efficiently as possible, you need to be organised and prepared to chase up people to make sure they complete their tasks on time. |
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| It is therefore beneficial to:- |
- Set up a project file/ book;
- Keep details of your various contacts;
- Make notes with agreed outcomes and deadlines when you speak/ email/ write to anyone;
- Don’t put off something you can do now!
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Why you shouldn’t Rent |
If you are in a position to commit yourself to the responsibility and can afford a mortgage for the property you want, why pay off someone else’s mortgage rather than your own?
If you don't like something in your own home, you can change it – no need to ask for someone else's permission and it will be yours!
As a form of investment – over the long term the average house price in the UK has outperformed building society savings accounts rates and inflation. |
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Looking at Houses |
| List your Priorities:- |
- Budget;
- Number of Bedrooms;
- Geography;
- Garden size;
- Parking;
- Amenities – Schools, Shops, Hospitals, Clinics, Leisure Centres etc.
- Public transport links;
- Activities in the local community;
- How much work, expense & decoration is needed to turn the house into your home;
- Location, location, location – spend time walking around the locality to make sure it’s where you want to be.
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Having listed your priorities, find a house that matches them! Once you’ve found somewhere you are happy with, try to view it more than once as what looks like a quiet residential street may be a busy short cut during rush hour.
Too much caution may see you miss out however, as popular properties can go quickly and you may have to make a quick decision.
Second opinions are invaluable, so take as many people with you as possible.
Prepare a list of questions before you meet the vendor.
Although a house may tick all of the boxes on your priority list, it is important to consider other factors that could have a significant impact on your pocket and spare time whilst living in the property:- |
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Older Properties |
Whilst they may initially seem attractive, somewhere that needs a lot of work can take up a lot of your spare time: in the evenings when you're tired and at the weekends when you would rather be doing something else.
In some areas it's very hard to find good builders and trades people. It is important to get a date out of them before you've actually bought the house, as some of them are booked up for months ahead, and if you are able to list the work, three prices to compare quotes. Again, only go on personal recommendations and where possible, attached to a recognised trade organisation.
Budget for hidden costs such as leaky roofs, rising damp, rot or woodworm. Be prepared for additional costs if the property is listed, as the local authority planning department may insist on expensive detailing.
Another alternative is to buy your own plot, but with ever increasing planning regulation, they can be rare, expensive and are usually very restrictive with the permitted size and style of property.
You can change many things about a house - decor, number of rooms, layout of the garden. But you cannot change where the sun rises and sets. So if you want a back garden that is sunny in the evenings, or if you don't like the early morning sunlight waking you up, check where the Sun is or would be at various times of day.
Insulation levels will vary depending on a number of factors but older properties will not have levels matching modern day requirements. Fuel Bills will therefore be more expensive than comparable modern day properties. If the property has central heating, older boilers will almost certainly be bigger and less efficient, and replacing them can cost a lot of money. Ask how often it has been serviced. Check whether the heating and hot water can be controlled separately. Does it take a long time to run a bath? Is there enough water for all the family in the mornings? The same stringent checklist goes for a property's electrics. When was the house last re-wired and who did it? (Ie, was it done by a qualified electrician or somebody doing DIY?) If the cooker is electric, has it been installed properly? |
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Leasehold Properties |
| English Property Law dictates that the freehold to a property must include the land it is built on, and therefore all apartments are sold on a leasehold basis with the freehold to the property being subject to a separate ownership. This often throws up problems, and so it is important with leasehold properties to do your homework:- |
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- Many developers retain the freehold of the property or sell it to a third party, which in addition to the service charge (typically less than £1000 per annum, covering running and maintenance costs), they may take a ground rent, which is simply a profit for maintaining the freehold;
- It is important to understand who owns the freehold and whether you have any influence in setting the service charge;
- How long is the lease? Typical periods are 99 years, 125 years or 999 years - Short leases will reflect on the value of the property and you may find it difficult to sell as once it expires, the lease will return to the freeholder;
- The preferable solution is for all of the leaseholders to set up their own company and become shareholders as they are in control of their own destiny;
- A third party company may be brought in to manage that company depending on whether any of the shareholders are prepared to spend their voluntary time managing it;
- Read the lease very carefully to see what your responsibilities will be;
- If you are to become a shareholder, ask for a set of accounts to see if the finances are being run well and an adequate ‘sinking fund’ has been allocated. (A ‘sinking fund’ is a sum of money allowed for in the service charge for major works that will be needed in the future);
- What is the position if the freeholder decides to do building work such as adding another storey to the block? Is there a history of planning applications for the block? Is there any possibility of buying out the freeholder? Questions like these will hopefully protect you from any unexpected nastiness.
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Allow for Hidden Costs |
- Surveyors
- Solicitors - get a personal recommendation if possible;
- Stamp Duty - current rates as follows:-
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- Furniture
- Soft Furnishing
- White Goods
- Removals - don’t underestimate how many possessions you have, and with all the other stress involved in moving, you have to decide whether you have time to move on your own, with a hire van, or with a removal company.
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| You also need to take the following running costs into consideration: |
- Mortgage repayments
- Mortgage protection insurance in case you fall ill or lose your job
- Life assurance to enable your family to pay off the mortgage if you die
- Contents insurance against the risk of theft, fire, flood or other accidents
- Council tax
- Services - gas, electricity, telephone, water etc
- For apartments - ground rent and service charges may apply
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Mortgages |
| Before you start looking for a house, get a “Mortgage in Principle”. |
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| A conditional offer made by a mortgage lender, it will set you up in a strong position when it comes to buying a home with the following distinct advantages: |
- You know your budget and what you can afford;
- Sellers will take you more seriously;
- You will be in a position to put in an immediate offer, which will be attractive to the seller.
- Estate agents should not pester you with their in-house mortgage advisor;
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Remember that, as a first-time-buyer, if you have a mortgage arranged you are almost as good as a cash buyer. First time or cash buyers are more attractive to sellers over people selling a property as you won't be buying subject to a chain of buyers and sellers.
It is worth spending some time comparing mortgages, and independent mortgage advisors are useful for giving you an idea of what is on offer and what you can afford.
Websites such as http://www.moneysavingexpert.com can offer you plenty of tips and information.
Save up as much of a deposit as possible as the more cash you can put down the more options you have and therefore more competitive mortgages will be available. Although mortgage company requirements vary depending on economic conditions, with a 20-25% deposit saved up you should have plenty of mortgages to choose from.
Allow for interest rates rises - calculate your repayments as if the interest rate goes up by two, three, five per cent or more as you could find yourself in trouble if you really are stretching yourself to buy somewhere. Capped and fixed rate mortgages do off some protection as you can budget for paying a definite amount for a set period of time.
Also remember that the value of your house can go down as well as up. |
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