What not to buy – 8 factors to be wary of when housing hunting in 2023
We all know that moving home can be a stressful process, and if you’re looking to make the big move this year it’s important to make the right investment so you don’t end up paying more than you bargained for. But what makes a sound investment? Here are some of the key factors which you should consider and be wary of when house hunting in 2023.
1. Do-er Uppers
Buying a do-er upper, i.e. a property which needs renovating, is often seen as a good way to secure a bargain and put your own stamp on your home. However, although the idea of getting stuck in doing DIY and knocking down walls may seem like a fun project initially, there are many factors to consider before you commit.
Although initially buying a project at a great price can seem like a cost-effective way of getting on, or climbing, the property ladder, often the sheer cost of renovating the house and bringing it up to a high standard can see buyers spend much more than they originally budgeted for.
One of the main factors to consider is that costs of home improvements have significantly increased over the past couple of years, with the average cost to do up a 3 bedroom house in the region of £77K according to Checkatrade. The pandemic, Brexit, rising labour costs and raw material shortages are all factors that have contributed to increasing costs, so it’s important to try and estimate how much the work will cost you before committing to the project, as you don’t want to find yourself running out of money halfway through your renovation!
Additionally, high demand for tradesmen due to repercussions of unprecedented demand in the housing market over the past two years, means that you can also expect delays along the way. This is especially important to consider if you or your family members work remotely from home, as living in a construction site which is taking longer than expected to complete could be a major disruption to your current standard of living.
If you do have your heart set on a refurb project, make sure you carry out the relevant surveys so you can fully understand the extent of work required, plus having a reliable and trusted team of tradesmen behind you is essential.
Check out some of these pros and cons from Zoopla for more information about fixer-uppers – Should I buy a fixer-upper or a home that is already renovated? – Zoopla
2. Poor Energy Performance Certificates
Although energy bills are predicted to fall in July 2023, they still remain far higher than 2021 due to the escalation of gas prices, meaning now is not the time to buy a draughty, poorly insulated property.
It’s important to find out the EPC rating of the home you’re interested in buying, keeping in mind that A, B, C EPC ratings are all considered good, whilst the average UK property has a D rating.
Although a property’s EPC can be improved, for example with the installation of a modern heating system or floor insulation, this will involve further and often expensive costs in the short-term.
For ways to improve your property’s EPC check out this blog from the Eco Experts – 7 Easy Ways To Improve Your Property’s EPC Rating – The Eco Experts
3. Leasehold properties
If you’re just starting out on the property ladder then buying a leasehold property, such as a flat, may initially seem like a great option. However, inflation alongside increasing insurance and staff and power costs, means that service charges are likely to increase further this year.
These service charges are part of any leasehold agreement and an important factor to consider before buying a leasehold property. How much you can expect to pay annually will depend on a number of factors, such as how big the flat is, how many other people live in the building, who the managing agent is and if there are any significant maintenance works in the pipeline. It’s important to note that service charges do rise and unfortunately leaseholders have no control over these.
Another cost to consider with leasehold properties is that conveyancing fees can be higher, due to the longer and more complex process involved. Your solicitors must carefully consider the terms of the lease and read through the management pack which will include a variety of important documents. Reading through this and raising enquiries can be very time consuming, hence the higher conveyancing costs.
For more information about leasehold and freehold properties, check out our blog post – Leasehold vs Freehold – What’s the difference? – YouConvey – The UK’s first collaborative conveyancing service (you-convey.co.uk)
4. Over-priced properties
Fortunately in the current market, sellers should be pricing their properties realistically, with the average house price falling by 2.3% in November according to Halifax’s index. This means as a buyer, make sure you don’t overpay for your property.
It’s important to undertake due diligence and review comparable properties to make sure the property is correctly priced, and look at factors such as how long the property has been on the market, how many viewings there have been, if the price has already been reduced, and whether there is any other interest.
There are a number of sources which you can use to check how much the property is worth, including:
- Property websites such as Rightmove and Zoopla who can provide an estimate based on the house’s sales history
- Land registry data which provides information on the sold prices of properties in the local area
- Estate agents in the area with properties on their books similar to the one you are interested in buying will be able to give you a good inkling of what you can expect to pay and whether they have any similar properties that may be of interest, possibly for a better price
5. Generic properties
If possible, it’s good to opt for a property that has unique features as this will give you an edge when you come to sell it in the future. That’s not to say to stay away from new builds, but if there’s one which has something special about it such as its layout, then this will give you a competitive edge. Whereas if you buy a generic flat that is identical to 15 others in the same building, when the time is right for you to sell and move on you may be competing with neighbours who could undercut you and drive down value.
6. Poor public transport connections
For many homebuyers one of the most important elements to take into consideration when buying a new property is the vicinity to public transport. Therefore, not only is it important to consider this for yourself on your house hunt, but also keep in mind when you do come to sell the property your prospective buyers will no doubt be interested in this too and if the house does have strong transport connections this can be a major selling point.
Some of the main reasons that this affects a home buying decision include:
- Saves money & time – if your home and workplace are located miles apart, then the cost of travelling to work every day can really add up, especially if you have to travel by car which would include costly petrol prices and, not to forget, the time wasted sitting in traffic during peak time. Whereas, if you have excellent public transport links you can save time and money, plus you’ll feel good about your improved carbon footprint
- Signals growth & development – if the area you’re interested in has the benefit of having a 24/7 bus service or tube station if it’s in London, this is a solid indicator for good connectivity and a sign that the area is well developed which is a big positive. Plus, regions with efficient public transport have higher property rates due to increased demand, which is attractive to investors and therefore makes way for excellent infrastructure development in these areas.
- Easy access to healthcare & educational institutions – areas with good roads and vicinity to a good public transport system have an extensive reach to hospitals, schools and other desirable amenities, such as shopping complexes
7. Properties without outdoor space
The outdoor boom began as a necessity during the pandemic, but it appears the appetite for gardens is still going strong. As lockdowns confined people to their homes, having outdoor space became a number one priority for many, and this initial need that seemed temporary at the time has become a change in lifestyle that may be sticking around.
Many studies in recent years have suggested that outdoor garden space is a significant selling point for many buyers, and a survey done by Rightmove found that 63% of homebuyers claimed having access to a garden or outdoor space is still a priority.
Additionally for sellers, a study done by the AA in February 2021 found that having outdoor space can increase its value by up to 5%, so if it’s something which you can afford then a property with a garden is a win win.
8. Location
There’s a reason the saying ‘location, location, location’ is such a popular one when it comes to house-hunting, quite simply because it’s the most important factor to consider. The condition of a property, and therefore the price of any home can be changed, however the location cannot!
The best location for you will depend on your lifestyle and the type of property you’re considering, however be wary of properties located above shops, bars and restaurants as it can be harder to get a mortgage above commercial premises, and being situated above a noisy business will make the property harder to sell in the future.
Similarly, houses on busy main roads, next to railways or under flight paths are also riskier investments, as both noise and air pollution can be deterrents to future potential buyers, especially families with young children.
On the positive side, things to look out for which show a desirable location include being close to local shops, access to green space and being in the catchment area for good local schools in the area.
So, with all of this information under your belt, we wish you good luck for your house hunting journey in 2023 and if you’re looking for any further advice or you’re ready to get the ball rolling with purchasing your new home, get in touch today – Contact Us – YouConvey – The UK’s first collaborative conveyancing service (you-convey.co.uk)