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Questions to ask when buying a property in London

Aug 04

Questions to ask when buying a home

Home Buyers, what are the questions to ask during viewings or before you buy a property? Asking the right questions before you make an offer on a property will place you in a better negotiation position and lead to a smoother conveyancing process. They will help you 1) assess better the value of a property you consider, 2) protect your best interest, and 3) make the most suitable buying offer.

1. ASK FOR THE PROPERTY INFORMATION QUESTIONNAIRE (PIQ)

The Property Information Questionnaire or PIQ is a legal document falling under Consumer Protection from Unfair Trading Regulations, that home sellers must complete prior to a sale for the purpose of transparency. Omissions and inaccuracies often lead to delays in transactions. The Property Information Questionnaire discloses any issues that would affect the transactional decision of the average property buyer, such as the tenure, service charges, insurance, works done on the property, geographical issues, whether it is in a conservation area, water supply and the property’s general condition. This is vital information for home buyers to obtain before making an offer as it helps them to be better informed and reduces fall-throughs at a later stage. You can obtain this document from the selling agent.

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

Home buyers in London must understand that a property that has been longer than 4 months on the market 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, always keep in mind that someone else may make a move more quickly than you do so if you really want a particular property, do not wait to make an offer. The properties that are 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?

If there has been little interest, this means that there is either something wrong with the property or that the price is too high. If there has been a lot of interest, the property may be bought at any time so do not delay making an offer at a price that feels right for you. If you have your financing in place and have hired a solicitor, the selling agent will take your offer more seriously. If you do wait for someone else to make the first offer, you may have to offer more than you initially thought to win the property, so do not delay if you have fallen in love with it!

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 prefer 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 type of buyer. You will usually have more negotiation power if the seller is in a hurry to sell. Cash deals are of course more straightforward, as long as they satisfy anti-money laundering checks. They usually justify a reduction in selling price.

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 catchment area.

questions to ask when buying a property London UK

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 applications 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?

If the property is part of a block or a shared building, there may be costly repairs or maintenance works ahead.

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. A bit like a tenant paying rent to a landlord. For Victorian or period properties, the ground rent paid is usually very 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 where 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 but 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, to find out more about these yearly costs over the last 3 years to get a better overview.

what questions to ask when buying a property

10. IS THERE A MANAGEMENT COMPANY?

In the case of leasehold properties, there is often a management company involved who 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, they must be consulted for any maintenance decision or expense by 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. Best to ask your solicitor for advice. Some modern properties’ leases can last 999 years and are called virtual freeholds.

13. IS IT POSSIBLE TO BUY THE FREEHOLD OR SHARE OF FREEHOLD?

It is possible for leaseholders to 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. 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%.

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 yourself directly, just 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 will affect the whole transaction timeline. If the owners want to buy a property first in order to be able to move out of the property you want to buy, then the property is deemed to be in a “chain”.

questions for home buyers to ask when buying a home

16. DOES THE LEASE ACCEPT PETS? GET A COPY OF 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. If you can, ask for a copy of the lease before making an offer. The selling agent should be able to provide it. 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.

18. HOW IS THE BROADBAND SERVICE IN THE AREA?

Broadband service is often something buyers forget to check. Given the large number of people now working from home, it is important to enquire what service providers cover the area: Mobile and broadband area checker

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

Ask for a list of fixtures, fittings and furniture that are included in the sale. You can then include the items you want to keep in your offer and use it in your negotiation.

20. HOW OLD IS THE PROPERTY?

If you are considering buying a period property, especially if it is in need of refurbishment, 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 is included in the warranty. Please think about asking how old are the boiler and the electrical system, as the homeowners may have lived for a while in the property and may not be aware of the latest standard regulations.

21. READ THE FULL ENERGY PERFORMANCE CERTIFICATE

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.

questions to ask when buying a house

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.

23. IS THE OUTDOOR SPACE COMMUNAL, PRIVATE OR SHARED?

Gardens, terraces and patios can be communal, shared or private. Make sure you understand if there are any specific rules regarding access. Some outdoor spaces look private but other residents may be allowed access, for example, to access the bins if the communal bins are located in that space. This applies to off-street parking as well. Some parking spaces are allocated, others are on a first-come-first-served basis. Verify if the parking space is included in the sale or if it must be purchased separately at an additional cost.

24. IS THERE KNOTWEED IN THE GARDEN?

Whether it is a private, shared, communal garden, or even a garden you don’t have access to but that is part of a block, always ask if a survey has been done about the presence of knotweed. Knotweed is an invasive specie that damages properties and that is very hard to get rid of. Mortgage lenders refuse to lend to buy such affected properties and buyers may end up with a property they can’t sell further. There are existing treatments against knotweed, albeit very long and very costly. A second opinion is strongly recommended.

25. HOW MUCH IS THE STAMP DUTY TAX?

Don’t forget to verify the amount of stamp duty tax you will have to pay here.

IN SUMMARY

Asking the right questions when buying a home is essential to understand the risks and potential issues arising during conveyancing or after you’ve purchased your property. You can uncover useful information that you can use in negotiating your offer. It can also save you additional costs you haven’t planned for and protect your transaction during conveyancing against fall through. Honesty and transparency from all parties involved are essential for a smooth and successful real estate experience.

We wish you a happy house hunting!

Home buyers questions to ask when buying a property

Do you have a property to sell in London?

Muriel can help you with a free property valuation, selling or letting your home or purchasing your next property, please call 07341 443 858 or send an email to Hello@wiserockproperty.com.

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