It’s easy to let your heart rule your head when you’re looking for a new place to call home. The new property is going to be the centre of your life, hopefully for many years, and you have to feel positive about it.
You need to feel the charm of the place, but a checklist of minimum requirements helps to keep your feet on the ground.
It’s a difficult balancing act.
The bottom line is that you need to be able to afford to pay for your home. Lenders these days are strict and often insist on a 20% deposit, so that’s one thing that’s going to limit your search. But check out the government’s “Help to Buy” scheme, which can provide what’s known as an ‘equity loan’ of up to 20% towards the deposit as long as you can raise just 5% yourself.
The idea is that you can wait until the property is sold to pay off the loan, so you only need a mortgage for 75% of the price, as long as you can find 5% yourself. The scheme only applies to new-build properties.
As far as the mortgage is concerned, you can get prior approval up to a figure that the lender thinks is affordable for you. Nowadays, lenders look at factors beyond your net salary. They will ask about your fixed outgoings as well, to make a more realistic judgement.
But even with this extra caution from lenders, the decision as to how much you can really afford to pay for your mortgage is a personal one. Maybe you have a hobby that means a lot to you, or you love travelling. You have to factor those things into the equation.
Do your own financial statement and be realistic about unexpected expenses, home maintenance, holidays and festivals. If the mortgage lender thinks you can afford more you believe you can, it’s better to be conservative and stick to your own judgement.
Don’t view houses that you can’t afford both in your own mind and according to your lender’s opinion. Get advice from an Estate agent with local knowledge, like Bridgfords for properties in the North, but be firm about your bottom line. What you don’t view can’t tempt you.
If you’re working you need to live within reach of your employment.
Look at locations within a commutable distance, and work out whether the financial and emotional cost of commuting will be worth it. In theory you might be able to travel for four hours a day, but that commute will dominate your life. Try it, and see whether you get a seat on the train, and how stressful you find the journey.
If the local station’s a terminus so that you can be sure of a seat and you enjoy reading, or you can work on the train, then a long commute may be fine. But if you would have to force yourself into an overcrowded train and spend over an hour standing in a crush before you start your day’s work, then that might be too much for most people.
Location has such an effect on price that if there’s a less fashionable area bordering the one you’d rather be in, then take a good look at it. If the town or city is thriving, then shabby areas may improve.
But that’s a slow process and one that may even work in reverse, so don’t count on a future improvement in value. Only buy if you are happy to embrace the area exactly as it is.
How much space do you need for your household? You will probably be happier with extra space in a shabby area than you will be feeling overcrowded and cramped in a pretty neighbourhood.
Think about what space you need to make you happy. You need enough bedrooms for the family, and ideally a spare room, though you can probably manage without.
But what about storage? Will you be able to create enough cupboard space so that you’re not always tripping over your belongings? Is it important to you to be able to sit around the kitchen table with your family?
Bear in mind that the seller is likely to have done a major de-cluttering exercise before putting the house on the market. There may be no clutter to see, but could that be maintained in this house or is the tidiness just for show? Where would you put that kitchen table that means so much to you?
A clever seller will try to create an appealing atmosphere, to pull you in and that’s all very well and good. But you have to see beyond emotions to the hard realities of finance, location and space.