Buying

Find property investment takes the guess work out of buying, selling and moving house.

Buying Property

First Time Buyers

Buying a house is one of the most important purchases you will make, and buying a home for the first time will be an even more daunting prospect. Add to this the vast array of mortgage products available from a wide range of sources, and you are left with a high-stress, confusing decision.

1. Location. What area do you want to be based in? Would you prefer to live in the centre of a city? An outer suburb? The countryside? You should consider how far you will have to commute, transport links, local infrastructure (such as broadband internet) and the type of community you wish to live in. Every estate agent will tell you that the three biggest factors that affect the long-term value of a property are "Location, Location, Location!"
2. Type of property. Do you want to live in a house or an apartment? If you choose a house, what type of building do you want? The main types of buildings are detached, semi-detached and terraced. When it comes to apartments, you should think about whether you wish to live in a large complex or a smaller converted building. Do you want to live on the ground floor or higher up? What communal facilities are available (e.g. garden, washing line)?
3. Size of property. Quite simply, you need to consider how many people will be living in the property. If you are planning a family, you may wish to consider a property large enough to accommodate everyone in the short- and medium-term. This should then lead you to the number of bedrooms you wish to have in your new home.

You must remember to remain realistic. Consider our previous example of someone making £25,000 per year that can borrow between £100,000 and £125,000. He/she will not be able to afford a 5-bedroom detached house in Central London . However, they could comfortably afford to purchase, say, a 3-bedroom semi-detached house in The West Midlands.

Buying Schemes

There are four options available to those who need a boost onto the property ladder. Some schemes are only available to key workers, such as nurses, doctors, firefighters, etc., or to council and housing association tenants.

Conventional Shared Ownership

This option is for those of us who cannot afford to buy a home on the open market. Under this scheme, you buy a partial share in a home - usually 25-30% - owned by a housing association. You buy that share via a mortgage. You rent the remaining share from your housing association (now called Registered Social Landlord.) After a year, you can buy more shares at current market value.

Do-It-Yourself Shared Ownership

This option is offered by a few local authorities. It allows you to select a property on the open market and then buy it on shared ownership terms with the local housing association. You pay rent to the housing association on the share you don't own.

Homebuy

This national scheme allows home buyers to get a 25% loan from the local housing association to fund the purchase of a home. If you qualify, you can apply for the loan from your local housing authority, and fund the remaining 75% of the property price with a mortgage. You pay back the 25% when you sell. This is mainly open to council or housing association tenants.

Key Worker Home buy

This scheme is open to key workers (nurses, doctors, teachers, etc.) in London. It allows key workers to find a property in London on the open market (under 90 minutes travelling time from work, up to a value of £210,00) and get an equity loan of up to £50,000 towards the cost.

Who is eligible?

Each scheme has its own priority list. The best advice is to contact your local authority and find out if you qualify for any of their housing initiatives. Usually, the following standards apply, but it is best to contact your local authority directly to find out qualifications in your area:
· You have been living in the borough for over 2 years.
· Generally, your minimum income should be at least £17,000 a year and your maximum household income is £42,000 for an individual, £50,000 for a couple.
· A European Union or British passport is required or permanent resident status if an overseas passport holder.

Viewing Properties

One of the key stages of buying a house is the viewing. However, it is not always easy to know how to prepare for this, what to look for, what questions to ask and how to ensure you have the full picture. Here is some advice which you might find helpful and a checklist of things to look out for and questions to ask about the property and its location.

Things to look out for inside the house and questions to ask:
· does the property need updating - if so, how much will this cost
· is the property in a conservation area or a listed building and could this restrict any future alterations
· are the rooms big enough for your needs - furniture etc
· what is included in the sale - land, garage, furniture, fittings, etc
· are the views good enough
· What are the cost of Council Tax and the average costs of other utility? bills such as electricity, gas, water
· why are the sellers moving
· Does the house have full central heating? If so, how old is it
· How is the water heated? Combination boiler or tank, etc
· have there been any problems with the boiler; when was it last serviced by a Corgi engineer
· If there is a loft, has this been insulated? If so, how long ago
· does the property have cavity wall insulation
· has the property been altered in any way and if so are the relevant planning and building control consents available to inspect
· is there any sign of subsidence (e.g. major cracks in the walls or the doors sticking)
· is there a smell of damp or any other sign such as the walls feeling damp, the wallpaper peeling/paint bubbling, watermarks or mould
· do the window frames have cracking paint? (If you can press your finger easily into the wood it's rotten)
· has the room recently been decorated, if so, why (a problem might lie underneath)
· how much storage space is there
· are there sufficient power points, how old do they look
· does it feel like it could be your home

The location

You should also make sure the location meets your requirements so here are a few things to think about:
· nearby main roads, or pubs, clubs or restaurants - they can be handy, but also noisy
· nearby railway lines - or overhead flight paths
· the feel of the community - does it seem friendly
· the aspect of the house - does it get enough light
· is the property well maintained
· the age of the property
· garden size
· the condition of nearby properties
· how good or near is the public transport
· are the local schools good
· are there any known plans for development in the area
· What are the local amenities like, shops, hospitals, leisure facilities, etc.
· what is the crime level like in the area
· What are the neighbours like? Are they noisy
· has there ever been a dispute with the neighbours (or anyone living nearby)

Putting In an Offer

So, you've worked out how much you can borrow, scoured the area for the right home and finally found the place of your dreams - now it's time to put in an offer. If you're using an estate agent, then you need to decide how much you want to pay, and instruct the agent to make the offer. The seller will let you know whether they accept.

Remember, although the selling price is what the seller expects to receive, they might accept a lower offer for a quick sale.

Don’t forget to work the affordability of the repayments placed on the offer you are prepared to make. You can always negotiate up but never down.

Chains

Property chain collapsing

Buying a house is a stressful experience. In fact, so much so that it ranks behind the death of a loved one and going through a divorce as one of life's most stressful events. When a buyer has to sell their property it can result in a large number of properties being dependent on each other. If one sale falls through, it puts all the other sales at risk.

Chains are very volatile. "Unlike Scotland, where a buyer is contractually obliged to undertake the sale from the time an offer is accepted, the laws in England and Wales mean that a buyer can walk away at any time," explains Lawrence Mayman, partner at Atteys Solicitors.

According to a survey by property report provider Spring Move, over 2.2 million people in England and Wales have seen house sales fall through in the past five years.

Gazumping

To avoid being Gazumped:

Ask that the property is taken off the market. If they know you're ready i.e. you have a mortgage in principle and are serious then the seller should agree to this.

But there's no real guarantee that competitors will be kept away, especially if the house is in demand.
You must get this in writing - or it really is meaningless.

A lock in agreement (aka a lock out or preliminary agreement or exclusivity agreement) could be made at this stage. This commits both parties to exchanging in a certain time.

Here's how it works:

The buyer and seller agree to pay a deposit - often 2% of the house price.

If either side changes their minds about the sale during an agreed period or, say, tries to change the price without good reason then they lose their deposit - usually to the other party, or perhaps a charity.
(Each possible reason should be pre-agreed eg if problems are found with the survey and so on.)

The "lock out" name derives from the sellers agreeing not to offer it to anyone else for a defined period.
These agreements can cost more money in legal fees but should give invaluable peace of mind at what is a very stressful time.

Note that if your solicitor doesn't like the idea then it might be an idea to look elsewhere for legal advice.
Their reluctance might only be because these agreements are relatively uncommon and your solicitor may not know how to write one. They may not admit this so, unless they can give you good reasons why not to do one, think about shopping around for someone who is willing and able.

These agreements usually last for 10 days. They should start from when you receive the contract, not from when the offer is accepted.

The sellers could worm out of the agreement by delaying sending you paperwork, but this could also be dealt with in the agreement.

Insurance can be bought to pay you an agreed sum to cover your lost costs if you're gazumped