Location

One of the most important, if not the most important, factors in the value of a property is its location. It is often said that it is better to buy the worst house on the best street, than the best house on the worst street, and this rings true in the majority of cases. Every property’s value is linked with those around it to some degree.

If you’re new to the area in which you are househunting then research is absolutely essential. Although estate agents can offer some help with this, you need to be conscious of the fact that they have an obvious vested interest and are working on behalf of the seller, not you. Therefore potential problems can often be glossed over, or even ignored if you don’t ask the right questions. Check out the sale values of other houses in the area, this will give you an accurate and current gauge of the market in the location, and it will tell you if the house is fairly priced. Visit the house at different times of the day and week. It may be that the area is serene and beckoning during the day, but full of teenagers by night – which isn’t the sort of thing you want to be made aware of once you have moved in. Take a close look at the other houses on the street, do they appear to be in good condition? Knock on the neighbour’s doors, and explain what you are doing. They are often the people who have the most candid information on the property and the area, and at the very least you will meet who you will potentially be living next to.

Think about your lifestyle, and what you like doing with your time. Does the house tick all the right boxes for issues such as proximity to entertainment, transport links, shopping, your workplace, health care, schools, etc. Remember that the house is for living in – and if its location prevents you from doing the things you like doing then it isn’t for you.

Always keep your personal situation in mind. While a property might be perfect for you at the time, will it still be perfect if your circumstances change?

Are you buying in a popular location? Look at the property from a seller’s perspective – will you have a problem selling the house when the time eventually comes? If you are making a big concession by buying in an undesirable area, how sure can you be that someone will do the same when you’re selling? If the leap of faith is too big then you could find yourself with a difficult to sell property, which will amount to wasted time and money in the long run.

The age of the property

You will probably already know if you like old or new properties, but it is still worth taking the time to think about the pros and cons of different house types before buying. Both new and old properties have many great benefits combined with a few drawbacks, and unless you uncover a real gem of house you are likely to come across some of these firsthand.

If the house has been built in the last twenty years, it is highly unlikely to have any serious problems that need urgent attention. Issues such as electrical wiring, plumbing, roofing, brickwork and general condition – inside and out – should be problem-free, making sure than you don’t have to shell out for any major repairs or refurbishments upon moving in, or in the coming few years. If the house was built within the last ten years then it may still have an active warranty, giving even more peace of mind if the unexpected should happen.

However, brand new houses often come at a premium, because of extra items such as appliances and carpets that are included in the price. New houses will often have smaller room sizes, so that three-bedroomed house on paper could turn out to have little more than one double bedroom, one single and one ‘box’ room in reality. It is generally difficult to expand new properties without spending big money, therefore it is hard to add value to any real extent, aside from overall property market rises. Unless you are buying in a particularly prestige location you are unlikely to experience any major short term increases in value.

Older properties can offer you larger rooms, a wider selling potential and a sense of ‘character’ that is rarely achieved in new developments. They can also present a great opportunity to own a house that you wouldn’t ordinarily be able to afford if you can find the time, money and patience to carry out any renovations that are needed.

Although, if a previous owner has had a go at refurbishments already, then you may find yourself paying for their mistakes. With older properties, the potential for structural, superficial and internal problems increases, all of which will add to your costs. If you do take on a run-down house, be prepared for everything that it can throw at you. Even if you are buying an old house that appears structurally sound, the chances of problems occurring in the future are far higher than with a new house.

The best way to compare old and new houses is to investigate what is available in your price range, and look at the differences between the properties that are out there. Perhaps you will be considering a modern one bedroom apartment against a two bedroom semi detached, or a two bedroom new build against an older three bedroom house. It is easier to weigh up your options from this position.

Viewing properties

The process of viewing properties can be a tricky business, and it is important to approach it with clear ideas of what to look for. People viewing houses are often swayed by issues such as décor and the current owner’s furniture, even though these things have little or no bearing on status the actual property itself. The concept of turning down an otherwise suitable house on the basis of wallpaper style is as ridiculous as choosing an unsuitable house because the owner’s sofa looks great, yet it happens. Décor is a transitory issue – don’t worry if it isn’t to your liking, in fact, the chances are that it won’t be. The relative costs of redecorating and even re-carpeting are largely insignificant in the great scheme of things when buying a house, so don’t let trivialities put you off.

While you should be ignoring some things, you need to be on the lookout for several other factors.

Look at the layout. Is it what you expected? Although an unusual layout might be acceptable to you, would it be an issue when you come to sell the house? Set-ups including bathrooms accessible through kitchens (common in converted terrace flats) or bedrooms accessible through other bedrooms (as found in certain older properties) could lead to an otherwise interested buyer walking away, narrowing your resale opportunities. If you find a layout quirky, chance are that others will too, so it is important not to make too much of a compromise on this to avoid problems later on. Think about how your lifestyle would fit in with the house, and the possible lifestyle demands of other buyer types. If the property’s layout impacts on these too much then it could limit future saleability.

The kitchen and bathroom are the most expensive rooms in the house to alter, so ask yourself if you could live with them how they are. While it wouldn’t be a good reason to overlook an otherwise perfect house, needing to replace these usually costs thousands of pounds. Work out whether you can afford to do this, or in some cases, use their disrepair/outdatedness as a bargaining tool when you make an offer.

Making an offer

When you have made your mind up after viewing the house - and doing all your homework - it is time to make an offer.

Do you know how long the house has been on the market? If the house has been for sale for just a week then a particularly low offer is unlikely to get you anywhere. On the other-hand, if the seller has been persistently unsuccessful for a drawn-out period then they will quite probably be prepared to negotiate lower offers.

If there is a lot of interest in the house, or you are particularly set on owning it, offering the asking price - or even higher - is a common practice. However, it can be a counter-productive situation to be in as a buyer if you get involved in ‘bidding’ with competitors, as the price of the house will exceed its actual value and you could find yourself in a difficult scenario when you come to sell.

People say that certain houses have an indescribable ‘x factor’ about them, which make you just know that you want them on first sight. While this might be true, it is almost never a wise idea to make an offer after just one viewing. Sleep on it, think rationally, and make at least one more viewing. If the house still has the same effect then great, make your offer, but if the effect isn’t there the second time then you will be glad you held back.

Sometimes house prices have informal conditions attached, such as ‘offers in the region of…’ (OIRO) or ‘offers over…’, which should play a part in how you pitch your offer. If a price is OIRO, it makes sense to come in under the figure, as it indicates that either the seller is willing to be flexible or the price isn’t firmly set. ‘Offers over’, as the term suggests, means that the seller considers the stated value very much a starting price, and won’t accept any lower offers. Keep an eye on these conditions, as they do tend to change depending on how long a house has been on the market.

Decide how much you are willing to spend on a house, at the maximum end. This is your budget, and will dictate how you should go about making offers on houses. Say for instance that your absolute maximum budget is £200,000. It would be a bad move to start making offers at exactly £200,000, because this would give you no leeway when a seller wants to negotiate.

Don’t be shy in making an offer below the asking price. The asking price more often than not has been set by the seller at a level higher than what they will settle for. Think about it from the seller’s perspective. Would you be happy to set the price at a level you were unwilling to sell at? It’s unlikely. Going in lower, sometimes by a fair amount depending on the situation, can reveal the true value of a property. Unsuccessful offers often result in the start of a bargaining process, in which the seller will indicate how much more would be required for them to accept. When this happens, you can move closer to what you are willing to pay.

How much can you afford?

When you’re arranging your mortgage and deposit it is easy to just consider the repayments and overlook your other monthly outgoings, and this could lead to some problems further down the line. It is one thing to secure a mortgage with a lender, and another thing entirely to be able to pay it back long-term! Calculate your total monthly income, and write a list of all your monthly expenditures, credit card bills, utility bills, loans, living expenditure, insurance, pension, savings, car etc. If you think you can realistically cover all of these on top of your repayments then you are in a position to move forward.

Carefully consider the type of mortgage you are going to be on, in relation to your situation. For instance, if you are not on a fixed rate mortgage, could you handle any unexpected increases in your repayments?

A good indicator of how much you should be spending on repayments is around one third of your income, (or yours and your partner’s income combined.) With mortgage outgoings around this level, you will be able to absorb any possible fluctuations or changes to your circumstances, although this of course varies on a case-by-case basis.

Use our mortgage calculator to find out how much you would be repaying on various rates, and get a better idea of what options you have.

Homebuyer's Report

Just because you might not be able to see damp spots peeling the wallpaper off the walls or other obvious telltale signs that a house might not be in the best shape, it doesn't necessarily mean that everything is fine. Unfortunately, it is not uncommon for sellers to 'paper over the cracks' (literally!) and cover up less desirable aspects of their property for prospective buyers. While this can occasionally lead to unwanted discoveries for buyers down the line, the system is designed to avoid the situation in the first instance. A Homebuyer's Report is a buyer's weapon of choice here, and will give you the peace of mind that an expert has investigated the property and documented their findings, allowing you to progress without worry.

Homebuyer's Reports cost upwards of £300, depending on the level of inspection that you would like carried out. While it might seem like even more unnecessary expense at a particularly trying time financially, a Homebuyer's Report could end up saving you much more than you might expect if something is revealed that would have otherwise gone unnoticed. Buying a house without the reassurance of a Homebuyer's Report could leave you open to any number of expensive repair and refurbishment jobs on your hands when you move in and discover the genuine condition of the house for yourself. Unsurprisingly, this is a risk that few buyers are willing to take.

Additionally, if a Homebuyer's Report uncovers something of note but that doesn't deter you from going ahead with your offer, it could be used as a bargaining chip to get the price lowered. If there is something that needs immediate attention then you can be sure that the seller already knows about it and would be hard-pressed to argue otherwise. The real value of a Homebuyer's Report can far exceed its cost.

Despite the many benefits of Homebuyer's Reports, in some cases they are not needed. If the property that you are looking at is less than ten years old, it is likely to be covered by an NHBC certificate - which should deal with any major defects. If you are confident that a newer property is in good shape, then the Homebuyer's Report could be one expense that you might be able to avoid.

House Prices

With all the talk of the housing market slowing down, is it actually a good idea to be getting on the property ladder? In the long-term, you can expect steady growth in the housing market, but in the short-term it is unfortunately impossible to predict what will happen.