What NOT to buy: nine features to avoid when house hunting now
Here are nine things buyers should avoid, according to property experts
looking to buy a property this year? With mortgage rates at a 33-year high, making the right investment is more crucial than ever. The question is: what makes a sound investment?
For first-time buyers, who are now spending two-thirds of their take home pay on mortgage payments, it’s a pressing question.
“Nobody knows how this year will pan out, so now more than ever, people should make sure they buy the right place and pay the right price,” says Roarie Scarisbrick at Property Vision. “The compromises you accept now will be amplified if you come to sell in a tough market.”
Construction costs are rising, so you might want to think twice about an ambitious renovation project, says Simon Tollit at Tedworth Property.
“The reality might be that it would be better to purchase a home that won’t require a significant initial outlay.”
If you’re hell bent on a refurb, make sure you know what you’re getting into, adds Seb Oliver at Mayfair Private Office.
“Ensure you have proper surveys conducted to understand the extent of work needed. Build cost inflation is real and the price of refurbishing has increased substantially in the last few years, so make sure you have a trusted contractor, architect and builder.”
Poor Energy Performance Certificates (EPC)
With energy costs at a premium, now is not the time to buy a draughty, poorly insulated property.
A, B and C EPC ratings are all considered good, while the average UK property has a D rating. A property’s EPC can be improved, but this will involve further costs in the short-term.
“Bear in mind that all costs are escalating,” says Scarisbrick. “The heating and basic running costs of a terraced house are rising fast, so I expect that people will finally notice the EPC rating on the bottom of brochures.
“A modern heating system and good insulation will help a lot. If the running costs of a property are on the limits of affordability for you, then remember these will only go one way.”
Potential cladding issues
It may seem obvious, but avoid buying properties —especially flats— with cladding issues, says buying agent Henry Pryor. “There are a lot of high-rise buildings that have been caught up in the cladding scandal. Even some three-storey buildings have been unable to get the necessary sign off from a surveyor, without which a lender will not lend.”
The best way to find out about cladding and other potential problems is to have the property properly surveyed. “Undertake thorough due diligence before exchanging contracts,” Tollit adds.
“Make sure the roof is in good order and that the managing agent is on top of repairs and takes their responsibilities seriously. If buying a lower ground floor flat – is there damp? Is it secure and safe? Are the common parts in good order?
“This type of due diligence will pay dividends in the long run. It is more about the condition of the property and the building itself rather than the type of property that people should pay attention to.”
Inflation, alongside increasing insurance, staff and power costs, is likely to push services charges up this year for owners of leasehold properties. Avoid this if you can by buying a freehold property – or one with a share of the freehold.
That said, getting a good deal on a short lease can be an opportunity, says Jack Reid at Orlando Reid. “If there is a property that has a short lease that is being sold under market value, this is a relatively easy way of adding value as freeholders are legally obliged to offer a lease extension (section 42) at a fair price.”
Location, location, location
“Location is always the first and foremost factor,” says Rhianne Mcilroy at Middleton Advisors. “You can add to and improve your home, but you can’t move it.”
Avoid properties situated above shops, bars and restaurants, says Pryor. “It’s sometimes harder to get a mortgage above commercial premises because of the business being carried out – or that might be carried out.” Being situated above noisier establishments may also make it harder to sell when the time comes.
Homes on busy roads, next to railways or under flight paths are also riskier investments, Pryor adds. Noise and air pollution are both deterrents for future buyers, particularly young families.
On the flip side, being close to local shops, green space and schools will make it easier to sell your property on. Post-pandemic, the “steep rise in demand for London village locations”, as Oliver puts it, means that proximity to a high street has become increasingly important.
The good news is that sellers should be pricing their properties realistically in the current market. As a buyer, therefore, make sure you do not overpay for your property.
“With the current scarcity of available properties, some agents are willing to push the boundaries on price, in part to win the instruction, so it pays to undertake due diligence and review comparable properties to make sure the property is correctly priced,” says Simon Tollit at Tedworth Property. “Overpaying could prove to be an expensive mistake.”
To make sure a is priced fairly, Guy Bradshaw at UK Sotheby’s International Realty recommends finding out how long the property has been on the market, whether there is other interest and how many viewings there have been. Look at similar properties. How do they compare in price?
If possible, opt for a property with unique features to give you an edge when you come to sell, advises Scarisbrick. “New build is fine, but you need to select a unit which has something special about it such as layout, light or outlook.
“The danger is that you buy a generic flat which is identical to 20 or more in the same building and when you come to sell you might be competing with others who could undercut you and drive down values.”