Timing the Market
We’ve noticed that the overall property market is on the rise and is definitely climbing upward, especially as property prices are likely to double ever 9 years (CLG Housing Statistics 2008).
However, as we’ve seen over the years, the market can fluctuate both up and down. This can lead to uncertainty within the market, where buyers no longer want to take on risks.
Overall, the most important thing is to make sure you can meet your repayment obligations. Even negative equity proves not to be a lasting problem, providing that repayments are continued to be made:
- budget carefully so you know what you can repay
- don’t over-borrow
- have a financial reserve in case you are unable to work for a period of time
- take out appropriate insurance such as income protection and critical illness cover (for more information on insurance see our “Guide to Mortgages”
Find Your Perfect Property
On the internet
The best way to conduct your home search is online. Believe it or not, around 95% of people search for a property on the internet.
Use property search engines like Nestoria, where you can search all the properties listed in the UK.
By driving around
Around 90% of buyers move to a property that is within 10 miles of where they’re moving from. So for most people a drive around the area they plan to move to is another great way to look for a property.
And, despite 95% of buyers now searching on the internet, the trusty old “For Sale” sign still has an important role. It’s estimated that between 30-50% of all enquiries are generated as by “For Sale” signs.
Lender’s valuation survey
As a condition of granting a mortgage, your lender will require a valuation survey of the property to be undertaken. This is to ensure that it will provide adequate security.
Usually, though not always, this is paid for by the borrower and costs from around £200. The problem for buyers is that they cannot rely on a valuation survey if it is addressed to the bank and not to them.
Furthermore, banks are only interested in whether the property will be adequate security for their loan — not whether you are paying too much. That’s why it’s much better to acquire a property development loan from a reputable, independent lender.
The answer is to get your own Homebuyer Survey and Valuation (HSV), also known as a Homebuyer’s Report, done by an RICS (Royal Institute of Chartered Surveyors) registered surveyor. This is important because it will tell you about:
- the general condition of the property
- major faults inaccessible parts of the building
- urgent problems that should be reviewed by a specialist before buying
- the condition of any damp proofing and whether there is any damp in the walls
- any damage to timbers, including woodworm and dry rot
- the insulation
- the drainage
- the value of the property
Getting a Homebuyer’s Report costs from around £250 and could save you thousands. If something turns out to be wrong with the property it will allow you to renegotiate the price — or even pull out altogether if it’s really serious.
Ask your lender if they will accept your Homebuyer’s Report in lieu of their own valuation survey. If so it may end up costing you a very little extra.