Questions to ask when buying a home

2. HOW LONG HAS THE PROPERTY BEEN ON THE MARKET?

A property on the market for longer than 4 months is considered an “old listing” and its owner may be more motivated to agree to a reasonable offer. It is more difficult to negotiate on price when a property has been freshly listed. However,  someone else may make a move more quickly than you do. So if you like a particular property, do not wait to make an offer. The properties considered the best deals are always the first ones to go.

3. HOW MUCH INTEREST HAS THERE BEEN IN THE PROPERTY? ANY OFFERS ON THE TABLE?

4. WHAT’S THE SELLER’S MOTIVATION TO SELL?

Find out if the owners are a family or an investor and why they want to sell. Understanding their current situation indicates whether the seller would prefer to sell fast or a family to buy rather than a buy-to-let investor. If the seller is an investor, he/she will likely prioritise a higher offer and won’t necessarily prefer any buyer. Buyers usually have more negotiation power if the seller wants to sell fast. Cash deals are more straightforward but the funds must satisfy anti-money laundering checks. Cash buyers often make lower offers.

5. IS THE PROPERTY CHAIN-FREE?

A chain-free property means that the vendor doesn’t need to purchase any property to be able to move out. If any buyer needs to sell his/her current property to be able to pay for a purchase, then a chain is created. There can be multiple buyers and sellers down the chain. So if one person pulls out, this may destroy the whole chain. And you, as a buyer, may end up in square one, searching again for a property to buy. A chain-free property means a shorter, easier and less unpredictable transaction process.

6. WHAT’S THE AREA LIKE?

Do your homework on the areas you consider and spend some time walking along the nearby streets at various times of the day to ensure that you are comfortable with local safety, amenities and public transport facilities. Don’t hesitate to ask neighbouring homeowners how they feel about the neighbourhood. If you move to a particular area or borough for schools, check that you are in the correct school catchment area.

7. HAVE THERE BEEN ANY RENOVATIONS DONE OR EXTENSIONS BUILT? IS IT POSSIBLE TO EXTEND?

Any major renovation, building extension or work done at the property should be disclosed and supported by invoices, building certificates and planning permission grants if possible. All past failed and approved planning applications can be found on the borough’s portal using the property’s address. It’s a great way to see if other properties in that street have been successful with particular extensions or planning applications if you have a specific project in mind. It is best to clarify what is possible before conveyancing starts to avoid disappointments.

8. ARE THERE ANY FUTURE MAJOR WORKS PLANNED IN THE BUILDING?

9. IS THE PROPERTY LEASEHOLD OR FREEHOLD?

The UK has the particularity to sell properties as leasehold or freehold,  terms that determine the “tenure”. When a property is leasehold, you must pay a yearly “ground rent” to a freeholder and comply with a lease contract. Like a tenant paying rent to a landlord. For Victorian or period properties, the ground rent paid is usually small between £1 and £500. For more recent and modern properties, the ground rent may be higher. Always check if the ground rent stated in the lease contract increases over time to avoid any misunderstanding, as there have been a few scandals in the past with ground rents doubling every ten years. Most flats are leasehold and a few are share of freehold or commonhold. Freehold properties are usually houses or stand-alone properties and there is no ground rent to pay. A share of freehold is a portion of freehold allocated to a flat and there is no ground rent to pay. Commonhold applies to flats and is a similar concept to share of freehold. It remains a rarity. All leaseholders, commonholders and their freeholders are responsible for sharing the maintenance costs and service charges. Ask the selling agent for the Management Pack if your dream property is leasehold or commonhold, and find out more about these yearly costs over the last 3 years to get a better overview.

10. IS THERE A MANAGEMENT COMPANY?

In the case of leasehold properties, there is often a management company involved that administers the service charges and executes the building’s maintenance works. Find out as much as you can about the management company, how easy it is to communicate with them and what is the quality of their work. Some management companies are notorious for overcharging services and providing poor maintenance works, crippling the property value’s potential appreciation. This information can be found in the property’s Management Pack.

11. IS THERE A RESIDENTS’ ASSOCIATION?

Residents’ associations are common in blocks of leasehold flats and are formed by the leaseholders. If the residents’ association has been officially recognised by the freeholder, it must be consulted for any maintenance decision or expense by both the freeholder and the management company. This helps balance the power between the freeholder, the management company and the leaseholders.

12. IF THE PROPERTY IS LEASEHOLD, HOW MANY YEARS ARE LEFT ON THE LEASE?

Properties with a lease of 80 years or less start to lose value every year. In this case, the leaseholder must approach the freeholder to renew or extend the lease. The fewer years are left on the lease, the more expensive the renewal/extension becomes. Leases are usually renewed for 90 to 125 years and there is no ground rent to pay once this has been done. There is an official way (statutory) and an unofficial way to renew or extend a lease. The official way, using specialist companies, has more conditions and is more complicated but your rights as a leaseholder are better protected. It is best to ask your solicitor for advice. Some modern properties’ leases can last 999 years and are called virtual freeholds. The Leasehold and Freehold Reform Act voted recently will take time to be implemented but promises important changes to the benefit of leaseholders. The Act makes it easier and cheaper for leaseholders to extend their lease to 990 years or buy their share of freehold, and gives them more protection.

13. CAN YOU BUY BUY THE FREEHOLD OR SHARE OF FREEHOLD?

Leaseholders can buy their share of the freehold and commute the tenure. This is called collective enfranchisement and it is easier to achieve in conversion flats or small blocks because you need to buy the whole freehold with at least 50% of the other leaseholders under the current rules. You’d need to have lived at the property for a minimum of two years (from the date of Land Registry registration) before applying. It’s useful to know whether the freeholder would be open to selling a share of freehold in the future, as this would be a way to add value to the property when you want to re-sell it. Buying a freehold or share of freehold can add a value between 1 and 3%. The Leasehold and Freehold Reform Act removes the obligation to wait 2 years and to pay the freeholder’s legal costs.

14. WHO ARE THE NEIGHBOURS?

Friendly and considerate neighbours with good communication skills are priceless in every sense of the term.  This is not always disclosed by selling agents as they may not be aware of it,  so you may want to speak with a few of the neighbours directly, to get an idea of who you’d live next to. Problematic neighbours may cause a property’s value to decrease when you want to resell it.

15. WHEN DO THE CURRENT OWNERS NEED TO MOVE BY? HAVE THEY FOUND SOMEWHERE NEW?

If the sellers need to move relatively soon, they will be more motivated to accept a reasonable offer. You can use this information when making your offer, where you negotiate a lower price against an earlier exchange or completion date to suit the sellers’ timeline. There may be issues when the owners do not know where they’ll move to, as this means they need to stay longer at the property and this would affect the whole transaction timeline. If the owners want to buy a property first to be able to move out of the property you plan to buy, then the property is deemed to be in a “chain”.

16. DOES THE LEASE ACCEPT PETS? READ THE LEASE

If you buy a leasehold property, the freeholder may explicitly forbid pets in the building and include a no-pet clause in the lease. It is possible to challenge such a clause but at a cost and there are no guarantees of success. However, if despite the clause, several existing residents do keep pets, it is more likely the freeholder will accept and waive the clause. Please read a copy of the lease before making an offer, it is included in the Management Pack. There can be other restrictive clauses which impose restrictions on subletting, laying wooden floors, removal of internal walls, hanging clothes to dry outside your windows or having a satellite dish.

17. HOW IS THE WATER PRESSURE?

Always good to check during your viewing.

19. WHAT IS AND WHAT ISN’T INCLUDED IN THE SALE?

Ask for a list of fixtures, fittings and furniture included in the sale (ex: alarm, white goods, integrated wardrobes, etc.). You can then include the items you want to keep in your offer and use them in your negotiation.

20. HOW OLD IS THE PROPERTY?

If you are considering buying a period property, we recommend organising a homebuyer survey or a structural survey at your own cost to avoid unpleasant surprises and additional costs after your purchase. If a property is less than 10 years old or a new build, you should benefit from a 10-year building warranty that covers any building defects. It is an insurance policy taken out by the builder or developer. However, it is not always transferable and you need to enquire what the warranty includes. Ask how old the boiler and the electrical system are and if there are any gas and electrical safety certificates available.

21. READ THE FULL ENERGY PERFORMANCE CERTIFICATE UNTIL THE END

You can easily find any Energy Performance Certificate here. First check that it is valid (10 years old maximum) and read at the end of the document the recommendations to improve the property’s energy consumption and insulation. The lower the rating, the more you will spend on energy bills. If you plan to rent out the property, the EPC rating must be a minimum E. From 2028, you will need a minimum C to be able to legally let out a property. The penalty for not having a valid EPC will also be raised from £5,000 to £30,000 from 2028.

22. WHAT BOROUGH DOES THE PROPERTY BELONG TO AND HOW MUCH IS THE COUNCIL TAX?

Council tax varies from borough to borough and some boroughs have a better “customer service” than others, whether it is for planning applications or for bin collections and street cleaning. You can check the borough and Council Tax band of a property here if the selling agent hasn’t given you this information. Once you know which borough and council tax band the property is attached to, you can Google, for example, “Westminster council tax band F” to find out the latest Council Tax rates.