Interested in buying property in the UK? Now is a great time to purchase property as an investment or to make passive income by renting to tenants. But before you make a decision as big as buying property, there are a few things you must know.
Making an impulsive or uninformed property purchase can put a massive hole in your finances and cause endless legal trouble. Don’t make the same mistakes as most first-time property buyers.
Follow these 5 tips, and you’ll be equipped to buy property in the UK.
1. Do Your Research
Your personal opinion about a property or location may be very different from the real factors that affect value. There are also many unseen factors that can change a property’s value in the present and future.
Make sure to do thorough research on a property before buying. This includes much more than just knowing the property’s history and condition. You should also check:
- The neighbourhood crime statistics
- Nearby schools
- Traffic and commute times
- Nearby development plans
- Natural disaster threats
- Pests in the area
If you’re buying a home with the intention of letting it, especially as a house in multiple occupation (HMO), you’ll need to seek out regulatory information from your local council. Getting HMO advice is critical, as becoming a landlord requires extensive paperwork, fees and licensing in most areas.
2. Know Your Buying Leverage
A real estate agent’s goal is to sell property at the highest price. If you know your leverage, you will have significantly more power to negotiate.
Never tell an agent that you’re moving house. If they know you have a property on sale, they’ll assume you are under pressure to buy a new home and are therefore willing to pay a higher price. Instead, say that you are a first-time buyer.
If you’re looking for an investment property, get as much information from the dealer as possible concerning resale value, but avoid mentioning investments or other properties you own. You don’t want the agent to think you have money to spare.
3. Notice Deal-breakers During a Viewing
Don’t drop £500 on a homebuyer’s home inspection when there are many deal-breaking issues that you can see for yourself during a viewing. Check the following in homes that you view. If you notice issues, pass on the property:
- Check for damp spots and musty smells in wood or around joints
- Inspect ceilings for cracks or spots
- Turn lights and appliances on and off
- Test the power sockets
- Test the toilets, taps, and showers
- Test the AC and heat
- Check the attic/basement for visible signs of damage or mould
- Inspect the locks
If everything looks good, knock on a neighbor’s door to ask if the previous owner ever complained about issues such as leaks, electrical issues, etc.
Now, you’re ready to pay for a proper home inspection.
4. Set a Budget and Stick to It
Agents know how to apply pressure to potential buyers to force an offer. This can lead to impulsive decisions that have no place in property buying. Instead of going into the market with a lax budget, set a hard line and stick to it.
You might think you’ve found your dream property, but if it’s outside your budget, then it clearly isn’t the right choice. Remember that remorse felt over not getting a property is far preferable to remorse felt after spending hundreds of thousands on a property that turns out to be a money sinkhole.
5. Inspect with Resale Value in Mind
Property inspections are critically important, but many standard inspections are intended to assess the livability of a property. If you’re buying a property as an investment, you also want to understand the resale value of your home. This requires different inspection criteria, including historical prices, the home’s layout, energy efficiency, outdoor areas, potential for renovations and more.
You can ask your inspection agency to assess for resale value during an inspection.
Investing in property in the UK is a big decision, but now is a great time to start. UK Property values are trending up, which means you could make tens of thousands of pounds in as little as a few years by purchasing the right property. Follow the tips above and make your money work for you in the property market.