Deciding on a property
When you find a property you should arrange to look at it to make sure it is what you will need and to get some idea of whether or not you will have to spend any additional money on the it, for example, for repairs or decoration. It is common for a potential buyer to visit a property two or three times before deciding to make an offer. The first visit only allows you to get a feel for the property and the area it is situated in. Once you have seen a property that you believe may be “the one” you need to do some research on the area, property history etc. Online resources such as Zoopla are very useful for seeing previous sale prices of the property in question as well as others in the area. This will give you an indication of whether the asking price is reasonable etc.
The internet is also a useful tool to check out the local area and satisfy yourself that it’s a place you’d like to live.
Second and third visits should be used to check that the decision you made with your heart is backed up with your head. That is, you need to look a the practicalities of the property and how you would live in it. You may take the chance to speak to the neighbours and make sure they are people you are happy to be close to. All these sorts of decisions are best made over time and with a growing experience of the property and its environment.
If you are thinking of buying a property, you must receive an Energy Performance Certificate (EPC), free of charge. An EPC gives information on the ensile prices of theergy efficiency of a property using A to G ratings, with A being the most energy efficient and G the least efficient. The certificate is produced by an accredited domestic energy assessor.
Trading Standards can issue a notice with a penalty charge of £200 per dwelling, where an EPC is not provided.
Where there is a Green Deal plan on a property for which payments are still to be made, information about this must be included on the EPC. More information on EPCs is available from the GOV.UK website at www.gov.uk.
A certificate is valid for ten years and can be used multiple times during this period.
Warranties for newly-built properties
If the property is a newly-built property, check whether it has a Buildmark warranty. Buildmark warranties are organised by the National House-Building Council (NHBC) which is an independent organisation with over 20,000 builders of new houses on its register. Before being accepted onto the NHBC register, builders must be able to show that they are technically and financially competent and they must also agree to keep to NHBC Standards.
The Buildmark scheme covers homes built by NHBC registered builders once the NHBC has certified them as finished. The scheme will, for example, protect your money if the builder goes bankrupt after contracts have been exchanged but before completion. It also covers defects which arise because the builder has not kept to NHBC Standards. For more information, go to the NHBC website at: www.nhbc.co.uk.
As well as protection under Buildmark, buyers also have protection under the home-building industry’s independent Consumer Code for Home Builders. More information is available at www.consumercodeforhomebuilders.com.
Is the property leasehold, freehold or commonhold
If the property is freehold, this means that the land on which the property is built is part of the sale and no ground rent or service charge is payable.
A property may be leasehold, which means that the land on which the property is built is not part of the sale. You have to pay ground rent to the owner of the land – who is called the freeholder.
The length of a lease can vary and you should check that the length of the lease on the property you are interested in buying is acceptable to the mortgage lender. You should consult an experienced adviser. We are always happy to help prospective buyers and borrowers in checking that a property is acceptable security for a mortgage lender.
In addition to ground rent on a leasehold property, you may have to pay an annual service charge. This usually happens with a flat. The service charge covers such items as maintenance and repairs to the buildings, cleaning of common parts and looking after the grounds.
A group of leaseholders living in the same building may have a right to jointly buy the freehold of the building or take over its management.
In England and Wales, you can get further advice about leasehold from:-
The Leasehold Advisory Service (LEASE)
2-6 Salisbury Square
Tel: 020 7832 2500
Tel: 02920 782 222 (Wales)
There is also a useful leaflet on leasehold rights in England and Wales. Go to the GOV.UK website at: www.gov.uk.
In England and Wales, the Federation of Private Residents’ Associations may also be able to help if a group of leaseholders want to set up a residents’ association. It can also provide legal advice and other information to its member associations. Its contact details are:-
If the property is commonhold, this means that you can buy the freehold of a flat and own common parts of the building jointly with the owners of other flats in the building (known as a commonhold association).
In commonhold a ground rent or service charge is not payable. However, a share of the commonhold association’s expenditure on maintenance, insurance and administration will be payable for the common parts of the building
There are circumstances where a lender may be unwilling to allow a mortgage to be placed. Typical situations of this type are:
- Where the property is derelict
- Where the property doesn’t have a bathroom or kitchen
- Where the property is of low value e.g less than £50,000
- Where a leasehold property has a short term left on the lease (typically less than 70 years)
- Most lenders will not lend on a property with any kind of structural defects or properties close to mining works, areas of landfill, recent flooding, or subsidence.
- Properties of unusual/non-standard construction (pre-fabricated concrete, steel framed)
- Properties with Japanese Knotweed
There are lenders who will consider the more unusual properties and we can help to identify these if you think there may be a question.