Buying a new home can be both an exciting and confusing process. For many of us, it will be the most expensive and important purchase we will make in a lifetime and the financial and emotional implications of making the wrong decision can cause drastic impacts on our mental health.
Especially for first time buyers, being blinded by the process and not taking into consideration factors such as right to light insurance, restrictive covenants and other charges can cause a huge headache in the future after we have made our property purchase.
Leasehold properties are notorious for the small print that can catch buyers out in the long-term, however, freehold properties are not clear from this either.
Of course, your conveyancer should flag any concerns with your property during the buying process, however, acting on these are the responsibility of the buyer and many brush these aside to avoid extra short-term costs or delays.
Below, we discuss common problems that are often overlooked in the small print and why it is crucial you don’t ignore them.
Right To Light Insurance
If a neighbouring property has benefitted from natural light for a certain period of time, this light is protected by law.
If your property blocks this, either from an extension or trees, you could be liable to pay out, even if you didn’t personally make those changes.
The current neighbours may have not had an issue with construction obstructing light to their windows, but they may sell and the new owners may not be so happy with it. They can still make a claim against you.
Right to light insurance means that if a claim is made against you, you are financially covered against any legal ruling. Ask your solicitor to check neighbouring properties right to light and get covered to protect yourself throughout your ownership.
Restrictive Covenants
These are conditions stipulated within the title deeds of a property and there are no set rules as to what it can contain.
This could be anything from not allowing pets in the property, prevention of satellite dishes or running a business from the building. These stipulations are often worded in a way buyers may not understand, your solicitor will alert you to these but it is not their responsibility to advise on them.
These restrictions may not immediately affect you upon completion but you should always consider the long-term consequences. You may not have any pets at the moment, but as families grow, would you want to add an animal companion to your household?
Your current cable TV provider may not be able to cover your new postcode and a satellite may be essential. You don’t want to be prevented from watching your favourite shows for the entire time you occupy the property.
Rentcharge
Rentcharge is when you do not own the land your property has been built on, therefore, the landlord will charge a fee for you to be on there.
Rentcharges are often a nominal amount of money but it can be more expensive. This will all be flagged early on and your mortgage lender so they can adjust anything accordingly.
However, where buyers often incur problems is when payment is forgotten. As this is usually such a small charge, it’s easy to forget about. If a payment is more than 40 days overdue the landlord has the right to enter a statutory lease against you, even if they have not sent the demand for payment beforehand. This means they are able to secure this debt against your property.
An act in 1977 prevented any new rentcharges from being created so newer properties should be free of this worry.
Upon completion, add to your list of utility name changes, the task of setting up a direct debit to the landlord within the first week of moving.
Chancel Check
Chancel repair liability is an obligation of properties within the parish of a historical, typically medieval, church.
These churches have the right to demand money from residents, regardless of their faith, to make essential repairs to the building. If you are getting a mortgage, mandatory searches will flag up if your property falls into this category.
However, if you are not buying with a mortgage and do not opt for searches, you may never be aware of this and receive a nasty surprise bill that you are liable to pay.
Always get a chancel search to see if you need to be covered and if so, a one-off payment of insurance (typically under £50) can protect you against having to personally make this payment.
Solicitor Fees
Especially when it comes to first time buyers, few of us know the ins and outs of the fees from the conveyancer. Yes, they will provide you with a quote for their fee, but beware of third-party costs.
These could be anything from search fees, money laundering checks to added fees for working with gifters or Help-To-Buy schemes.
Even the most transparent of conveyancers can come across unforeseen costs that are the obligation of the buy to pay.
Many of us have the purse strings stretched to the maximum when buying a property and these extra costs can have a significant impact on us. Always factor in some contingency, you can even discuss this with your lawyer in the early stages and they can suggest an amount.
In the worst-case scenario, this will have to be used but at least you were prepared, in the best case, you won’t have to touch any of it and you can use these saved funds for new furniture or a lick of paint throughout your new home.
Every property is different and even the most experiences of conveyancers will always come across something new. It’s important to listen to their advice and really take into account what you have been told, instead of trying to rush the process due to excitement.