​​First time buyers – What should you consider when buying your own home?

​​First time buyers – What should you consider when buying your own home?

According to a article by BBC News published in January 2017, last year was estimated to have seen the highest number of first time buyers since 2007.

The government Help to Buy schemes and low mortgage rates have made buying a home a much easier undertaking for many first-time buyers.

Despite this, finance is only one of a number of matters to consider in property transactions. Here are five things that a first-time buyer should consider when purchasing their first home:

1. Should I buy Freehold or Leasehold property?

Owning the freehold of a property means owning the property itself and the land it stands on outright. You own the title absolutely and are known as the 'freeholder'. Freehold is usually the preferred and more straightforward option.

Owning a leasehold interest in a property means having a right of occupation for a certain period of time in return for paying a rent. These could be for a relatively short period of time, perhaps 10-20 years, and charge a regular monthly or quarterly rent. Alternatively, they could also be long term lease, often 90-100 years, and are bought for a lump sum, called a premium.

Leaseholders will usually have to pay annual services charges and ground rent. There may also be restrictions with regards to owning pets or subletting. It is a less permanent form of tenure and the landlord can in some circumstances end the lease prematurely.

On the other hand, purchasing a freehold interest is often a much larger and more involved undertaking. If you are looking for a temporary form of ownership leasehold may be more appropriate, whereas if you are looking to settle in an area freehold might be more satisfactory.

2. What to look for when inspecting a property and when to have a survey carried out?

The seller has very limited duties to disclose matters regarding the property to you, and you should therefore always carry out a number of checks to find out as much about the property as you can. You can then make a fully informed decision as to whether to proceed and purchase the property.

Amongst other things, it is worth having a survey to check for the following:

  • Moisture problems, signs of damp, leaks or water damage
  • Examine the walls for cracks or loose plaster. Hairline cracks can be expected but major cracks would be cause to instruct a surveyor.
  • Cracking paint or condensation on windows and doors.
  • Are there cracked and broken roof tiles? Issues with roofing can be expensive to put right.
  • Are there any large trees growing too close to the property? Roots can cause structural issues with the building and may be subject to Tree Preservation Orders.

These are just a few examples of what to look out for when viewing a property and deciding whether to have a survey carried out. If you identify one or more of the above issues, a survey would provide you with an in-depth report of any issues and will ensure you are buying the property with the full knowledge of its condition.

3. Funding the purchase. What is involved?

Your first step when looking to buy a property is to meet with a financial adviser who will be able to ascertain your affordability and discuss what finance options are available to you. If you chose to take out a mortgage, your solicitor will report to you on the mortgage offer and will also act for the mortgage company during the transaction.

If you are a cash purchaser or are receiving a gifted deposit from a family member, your solicitor will require evidence of the source of those funds in order to satisfy Money Laundering Regulations.

Whatever form of finance is chosen, you should always consider carefully whether it is suitable for your requirements and whether you will be able to repay any loan. Such loans are very likely to be secured against the property itself and the lender may have certain rights to enforce any default in payment, including applying for the property to be sold.

4. Why does my solicitor need to investigate the Title?

It is important that your solicitor investigates the property title. This will reveal any covenants or restrictions to which the property is subject. For example, any rights of way or charges or restrictions that you would want the seller to remove prior to completion. Finally, any covenants that you as the owner would be subject to in relation to the use or development of the property.

5. Why should I instruct my solicitor to carry out conveyancing searches?

Searches are used to identify additional information about a property that would not otherwise be known. A local search, for example, may highlight planning permission issues or whether there are conservation areas, railway tracks or roadworks in the proximity of the property that may affect the quality of life in your new home. An environmental search will reveal, among other things, potential issues with subsidence or contaminated land.

It is for the above reasons that it is important that the relevant searches are carried out prior to an exchange of contracts, in order that you are fully informed before committing to buy a property.

Clapham & Collinge property experts understand the difficulties that can come with buying a property, particularly for first time buyers who are new to the process, we have created a downloadable Conveyancing Jargon Buster PDF to assist anyone looking to buy their first home. For more details on any property related issues, please contact us on 01603 693500 or email us using the 'Make an enquiry' form. Appointments available at our Norwich, North Walsham, Brooke and Sheringham offices.