Confidence amongst both buyers and sellers is returning, with property website Rightmove highlighting that property prices have risen at their highest rate for several years over the past month or so.
So, if you are looking for property and you have identified a home that appears the choice for you, what other potential pitfalls do you need to consider?
Below we have outlined the biggest things to look out for, whether you are a cash buyer or arranging a mortgage, from budgeting to legal rights. The below points are relatively specific and are intended for those looking to purchase the freehold as opposed to a long-term leasehold.
A Survey is Essential
Whatever property you purchase, from a 100-year-old property to a new build flat, a survey will need to be carried out.
You will be encouraged by an agent that there are no problems, but often there are underlying issues not visible to the eye that often surface months or even years after the purchase of the property. Defects and expensive repairs, if found, can stop you from the purchase, or at least give you room to negotiate the price further.
A survey also shows previous works that have been done on a property. This could give you piece of mind if unaccounted for work has been carried out that you will not need to do yourselves. This of course also alerts you to unauthorised works on the house.
Advice should be sought from the surveyor you choose regarding the form of survey carried out. Any irregularities in the property would be require a full survey, whereas a homebuyer’s survey, something less time consuming and costly, is recommended for a conventional, modern property.
Stamp Duty Requirements
Stamp duty is payable on almost all property transactions, and often makes up a significant chunk of the property purchase. With the rules getting more complex all the time, it is important you stay up to date on what you will owe.
There are talks that, in the immediate future, the stamp duty threshold could be raised to £500,000. First time buyers are currently exempt for purchases up to £300,000 and a lower rate up to £500,000. Others pay between 2 and 12 percent, depending on the value of the property.
If you already own a property you will have to pay an additional 3 percent on top of the above.
The Legal Title
Title documents are available online for the property you are interested in through the land registry. This will contain crucial information about the legal rights and obligations surrounding the particular property.
Chances are you will use a solicitor to aid in the purchase of your property, and they will deal with the land registry documents (and the above stamp duty). However, there is no harm in doing so yourself.
You will need to look out for restrictive covenants, these being rules imposed on the use of the property as part of the previous dealings. This is reviewed for the potential restrictions on rights to build and renovations. This can even flag things such as a neighbour right of way, which in extreme cases runs through the prospective properties garden.
However, these are sometimes historic and not capable of enforcement, but it is interesting at the very least to see how the property started and its history!
Access to the Property
You need to make sure you have reviewed access to the property. Whilst most houses join onto a public road which is not an issue, some homes have privately owned land before reaching a public road, this not always being obvious upon inspection.
Again, your solicitor should check this. If they have not, insist that they do. If the land is owned by another, this could be a deal breaker when purchasing the house as you would not have a right to drive through this to park your car.
Method of Purchase
Are you intending to purchase with cash or taking out a mortgage? Or will it be a combination of the two?
The results of the previous surveys (or lack thereof) can hinder your chances of securing a mortgage if the results are not positive, even if you are happy with the results of the survey yourself. Whilst a solicitor will draw attention to this before applying, that doesn’t prevent the difficulties you may face.
With mortgage rates remaining so low, it is a favourable time to borrow money for the mortgage. That said, ensure the property is worth at least the amount you wish to borrow and practice good credit practice to ensure that the money is secured at the end of the mortgage term.
Watch Out For Fraud
Surprisingly, fraud continues to be an issue in the property market, though not all that common.
Things to look out for are commonly in the ‘seller’ not actually owning the home. Once the sale goes through, the fraudster disappears without trace until the fraud is flagged. Once again, a solicitor should easily identify this issue, but it is always recommended that you are aware of this potential risk when purchasing property.
High risk flags are unmortgaged properties, sellers with limited knowledge of the property they are selling and transaction having pressure to be pushed through, with the process ultimately being rushed.
Never succumb to peer pressure when it comes to purchasing property, even if the seller is claiming there are others interested. This is a massive financial decision you will be making and requires a lot of patience to ensure everything is just right.
Make sure you register for the Land Registry’s property alert service that will automatically alert you to any application being made to change the title register.
Following the above tips will ease the purchase of property and cover your back. Shell out for a goof surveyor and solicitor, this will likely save you money in the long term and provide greater ease of mind.