Things To Consider Before Buying a House
As one of the most significant purchases of your life, there is much to consider before deciding to buy a house, whether as a first-time buyer, an experienced homeowner or property developer who has just secured a bridging loan.
Today, home ownership can be an advantageous option when compared to the rocketing costs of private renting. If you are ready to take that exciting step to end those monthly payments to your landlord and start the house hunt, then its time to consider these important points before hopping onto the housing ladder:
Costs of Moving
The main costs to include when moving are:
- mortgage broker fees
- monthly mortgage repayments (do you go standard, fixed or variable?)
- hiring a moving company
- buying new furniture, TVs and appliances
- home and contents insurance
Financial security should be your number one priority in the case of buying a house. Consider the true costs of buying; how much can you actually afford? Think ahead, how long will it take you to save for your deposit? How much can you afford to repay each month? How long will it take you to pay off the mortgage? And of course, are you getting the best interest rates? If you can afford larger monthly repayments, you could have a shorter mortgage and end up paying less in interest in the long term.
If you are a first-time buyer, you could benefit from the Government’s Help to Buy Scheme and if you are under the age of 39, the newly available Lifetime ISA. The Government will add a 25% bonus on top of savings when used towards a deposit. Deposits, surveys, legal fees, insurance, stamp duty, valuation fees and removal costs are all essential factors that you should consider in the budgeting process as suggested by Money Saving Expert. Of course, having some spare cash in your pocket goes a long way when it comes to those unexpected moving in costs.
Choosing a Location
City or country? Commuting or walking? Fresh air or pollution? Is there 4G signal coverage or is it a phone signal black spot? Whether you are uprooting to the big smoke or escaping to a donkey farm on the edge of the Peak District, location is KEY in the search for your perfect home.
Think about what is important to you in the long term. If you work from home, great. For the most of us, your commute is an essential part of daily life, so consider the costs of petrol or train fares on a yearly basis. If the thought of being crammed against fellow commuters on the tube on a hot summer’s day makes you shudder, then you need to reconsider.
Spending a little more for a better location in return for a pleasant walk to work each day, might be the right choice for you. Do you mind being close to a noisy railway station so that you can dash out the front door, and still have time to grab a coffee en route to catch your train? Is the house underneath a busy flight path?
Check out Ofsted reports to get a gauge for the best schools in the area. Check how far away the nearest supermarket is, and does the local pub have your favourite beer on tap? Weighing up the pros and cons, however large or small can be a laborious task but, in the long run, you will thank yourself.
Viewing The Property
This is your chance to assess the nitty-gritty. Always view the property more than once and at different times of the day. Your estate agent is there to be quizzed, so prepare for each viewing by being armed with questions as advised by the Home Owners Alliance.
There’s likely to be some negative factors that the vendor or agent will be keeping from you, so it’s important to draw these out before you purchase. Ask how long the house has been on the market, or why the seller is moving?
Have there been any recent issues with the boiler and how energy efficient is the place? Have a scan of the windows and walls in each room to check for damp or cracks, you don’t want to end up having costly repairs later on. Especially something like asbestos which could make the property absolutely inhabitable – so getting this checked beforehand could save you a lot of time and hassle.
Does your furniture match the decor or will you have to redecorate? Can you actually envisage yourself living there for the foreseeable future? The answers to these questions will save you time and help you to avoid disappointment.
Will it Hold its Value?
As a keen property investor, you need to know whether or not this place will keep its value or be worth significantly more in the future. There are some areas that are certainly up and coming and likely to skyrocket in the next few years, such as Tottenham (following the rejuvenation of the stadium and area) and trendy-Shoreditch with Long and Waterson’s development scheme.
A good developer is able to suss out a good deal on the market or at auction and see the potential return on their property after 1,2,3 or 5 years. Above all, you need to consider whether the work you are putting into any refurbishments or renovation will bring you a good margin. You certainly don’t want to spend too much on a loft conversion, garage and bespoke kitchen only for the area to not maintain its value.
Is There Room For Improvement?
There are several smart ways to increase the value of your property and being able to spot that potential is key. For instance, seeing that there might be space for a basement, loft conversion or conservatory can easily increase the value of the home by 10% to 30%. Importantly, is there the opportunity to get planning permission to do these kinds of changes or will there be obstructions from the neighbours and local council?
As a property developer, you need to be able to see potential immediately. Other ways to boost value of a home include sprucing up the garden, adding some kerb appeal like doing up the windows, lighting and entrance.