When you’re house hunting and finally find the property of your dreams, it can be really easy to get swept away in the excitement of it all. But there are serious considerations to be made before you dive in. Here we look at what you need to think about.
What is the true cost of the house?
Whether you’ve been able to knock a few thousand off the asking price, or you’ve been involved in a bidding war, the amount you’ll pay for the house isn’t simply the amount that’s accepted by the buyers. Stamp Duty – the tax on buying property or land – will add a noticeable amount on to your total.
How much you pay depends on the purchase price (first-time buyers are exempt up to £300,000): you’ll pay nothing on houses under £125,000; 2% on houses up to £250,000; and 5% on houses up to £925,000. For example, if you’ve offered £279,000 on the house of your dreams, you’ll have to factor in a £3,950 Stamp Duty payment into your budget. And if it’s your second home or an investment property, you’ll pay 3% on top of that. In the south east and London where house prices are higher, this can be a substantial consideration, so it might be wise to seek help from a financial adviser in London before purchasing it. It is also wise to consider how to choose home listing alerts so that you can find the best deal, particularly when you consider how expensive property can be.
Other costs to consider are your estate agent’s fees and those of your conveyancing solicitor. These vary according to who you use, but as a general guide, you need to factor in between 0.5-3% of the sale price for estate agents and between £850-£1,500 for conveyancing fees. There’s also the mortgage arrangement fee that your lender will typically charge.
Will you need a survey?
Surveys are another unavoidable cost in the house-buying process. And in some cases, you may pay for a survey on a house sale that falls through further down the line. The costs vary according to the depth of survey that you require. A Condition Report survey, for example, suitable for new properties will cost between £400-£950, whereas a Building Survey, which is more in-depth and will identify any defects or repairs that may need doing will cost around £600. Look for a RICS-registered chartered surveyor – you can find one local to you on their website.
What is the area like?
If you’ve fallen in love with a house, it can be easy to forget to look at the neighbourhood – which is something you won’t be able to change once you’ve moved in. Before you make an offer, spend some time walking around the area. Does it have a nice vibe? Are there busy roads nearby? Are there conveniently located bus stops, cafes, schools, open spaces and other amenities?
Next, get online and check out community groups on Facebook and Nextdoor to find out what people are saying about the area. Are there plenty of local events happening or are there a lot of burglaries or petty crime, for example?
What is the resale position?
You probably won’t be thinking about reselling for a while, but the time will eventually come. So, have a think about the house’s resale potential. If you think you can put up with the noisy dogs next door, or the smaller-than-average garden, will any future potential buyers be willing to do the same? Other things to consider are the number of toilets, amount of storage and extra bedrooms. If you’re considering buying a house with only one toilet, for example, you may need to consider putting another one to increase its resale potential.