Top Ten tips on how to buy a house in the UK
Buying a house is an expensive business. It is unlikely that you will ever spend as much on a single purchase in your life. My Top Ten tips have come out of my experience of buying properties; I hope that they help you to make buying a property as easy and as stress free as possible.
Tip Number One – Allow for significant upfront costs including Stamp Duty and Conveyancing Fees
Before deciding how big a mortgage you can afford you need to be aware that you will have to pay for both conveyancing fees and Stamp Duty on completion.
For an average house in the UK (around £240,000) you can expect to have to pay:
- Conveyancing fees - £ 1,000 - £ 1,500
- Stamp Duty - £2,400
- You will also have to pay Buildings insurance from the day you exchange
Current Stamp Duty rates (check the following link for the latest rates http://www.hmrc.gov.uk/sdlt/intro/rates-thresholds.htm ):
Current Stamp Duty rates
Stamp Duty rate
Up to £125,000
Over £125,000 to £250,000
Over £250,000 to £500,000
Over £500,000 to £1 million
In addition, include any moving costs as well as any budgeting for any new furniture, DIY or repairs that are required before you move in.
Tip Number Two – Allow for increases in interest rates when deciding how big a mortgage to get
As well as any up front costs, it is always prudent to have sufficient income to cover any increases to mortgage interest rates. Broadly speaking, your mortgage should not be more than 30% of your gross (before tax) income.
Use a mortgage repayment calculator to ensure you can afford the repayments (the interest rate can by changed to simulate a change in the mortgage interest rate you are charged). I have a hub on mortgage calculators that can be found here: http://robbiecwilson.hubpages.com/hub/Using-the-PMT-PPMT-IMPT-and-ABS-functions-to-create-a-Mortgage-Calculator-in-Excel-2007-and-Excel-2010 and another on Amortisation schedules (calculating how much interest and principal you pay in each mortgage payment, as well as calculating the impact of overpayments) which can also be found here:
Tip Number Three – Spend as much time as you can in the neighbourhood you are looking to move to
Finding the right area for you to buy your house in is critical. Depending on your circumstances, you will either be looking to buy in an area that is well known to you; or in an area that you are not familiar with. If you are looking to buy in an area you do not know well, do not despair, with some targeted research this need not be a problem.
Have a good look around, at all times of the day and also at night. I cannot stress this enough. Walk around the area as much as you can, get a feel for the area and also which streets you like/ don’t like. I know personally of people who bought without knowing the area well and have either lost significant amounts of money when they went to sell on, or have had difficulty with localised crime and or unsavoury neighbours due to their lack of research.
Tip Number Four – Ask as many people you can find who live in the area their opinion of the area
Again, this is key so that you can add to your own knowledge of an area. Ask as many people as you can, the more the better. If it is reasonably local to where you currently live then ask people at work. There is a good chance that someone’s mum, sister or brother lives there. Of course, use the internet to look for news although many areas are quite small and do not have much of a presence.
Once you feel happy with the area that you have picked, it is now time to focus in on the streets within the area that you would like to live on.
To narrow an area down to streets that you like, my first tool of choice is Google Street Maps. This allows you to quickly look around an area and get a good over view of the area and its boundaries. Additionally, you will be able to spot all the shops, pubs, parks, schools and other features you may like or dislike in the area.
Tip Number Five - Use the Internet to tour your area virtually
I use Google Maps extensively when researching an area. There are a number of things I look out for:
- Gardens, are they well tended?
- Skips or scaffolding are an indication that houses are being improved
- Well kept house facades
- What type of cars are parked in the street / car parks
- Nearby schools
- Nearby council estates
- A or B roads close by
- How close are the shops?
- Is the house on a bus route?
- Are there any industrial estates in the areas?
- Any parks or gardens close by?
Tip Number Six – Check Crime data for your chosen area
The police in the UK have an excellent site that can not only highlight crime in the area you are looking to buy in, but also compare it with other areas nearby. Crime not only affects your own feeling of safety in your house and your local area but will also affect your insurance premiums. The website address is www.police.uk
Tip Number Seven – Identify streets in the area you like
Now, using your own criteria (you may for example, be looking for a bungalow near a particular school) decide on the streets you would like to live on in your chosen area.
You may also decide you want a south facing garden which will further limit your choices. Again, I would thoroughly recommend walking the area once more, looking at the streets you like and the surrounding areas. Talk to neighbours and shop keepers in the area to get more of a feel for the place.
Tip Number Eight – Finding the right house for you
OK, so now we have an area in mind, and we have narrowed it down to a number of streets that we like, it is now time to select what we would like in our house. Again, these will be entirely subjective. However, they may include factors such as:
- An open plan kitchen
- A specific number of bedrooms
- A bath and separate shower
- A south facing garden and so on
This will help you narrow down the houses you will be interested in actually viewing. Decide which of your factors are compulsory and which are nice to have. You may have to compromise depending on your budget on some of the nice to haves.
Tip Number Nine – Use the Internet to assist in the search for properties
These not only allow you to find properties that suit your requirements, but also to get a feel for the local market and exactly what you can afford on your budget. You can further filter results that these websites send you with your additional requirements such as; a south facing garden, or a conservatory.
Depending on your requirements and the number of streets you are looking at as well as market conditions it may take some time for a house to come up for sale. If you are concerned it is taking too long then you may have to adjust your list of requirements or the amount you are willing to spend.
Tip Number Ten – The Viewing
So now for the exciting part, we have narrowed it down to the right house on the right street in the right area with all of your designated must haves.
- Firstly, it is a good idea to bring along someone with you who will provide you with an objective opinion.
- Feel free to bring along a camera and a note book to jog your memory once you have left the property.
- If the house is not vacant it is polite to ask before taking photos.
There are a number of questions that you might like to ask including (but not limited to of course):
- How long have you lived here?
- Why are you moving?
- What is the area like?
- How do you get on with your neighbours?
- How new is the boiler?
- What fixtures and fittings will be left behind?
Bear in mind of course, they (the vendor and or the Real Estate agent) have a vested interest in the property and use this to weigh up the importance you should place on their answers. Remember, you are going to pay a lot of money to live here so it is wise to have a good look at the property.
Once you have asked all your questions and had a good look around and taken any photos you may wish to sit down with the person who provided you with an objective opinion and decide what action to take next.
If you decide to proceed, ensure that you can are not over extending yourself with any offers or counter offers. Just remember, at this stage it is still only bricks and mortar so try not to get to emotionally involved in the purchase process.
Final Tip – Pay a little extra to get a thorough survey
My last piece of advice is regarding the survey. Again, as you are spending a lot of money on buying a house, I recommend against getting the cheapest possible survey. The Home Buyer survey is detailed and thorough enough to point out any potential issues with the house.
Many thanks for reading and good luck with finding your perfect house!