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Six Things to Avoid when House Hunting in 2023

Six Things to Avoid when House Hunting in 2023

The Bank of England’s recent interest rate rise to 3.5% means that many first-time buyers are now spending up to two-thirds of their home pay on mortgage payments. With mortgage rates at a 33-year high and uncertainty around inflation and cost of living, making the right investment is more crucial than ever, so we’ve compiled a list of things to avoid when buying a home in 2023.

 

1.       Do-er Uppers – do your sums

Unless your costings are 100% accurate, it might be time to rethink that house requiring significant work. Inflation is calculated to be at 9.2% at the end of December last year, and higher costs of living mean that you may want to think twice about an ambitious renovation project. Pricey ready mix concrete increased by over 7% between 2015 and 2023, while the price of concrete reinforcing bars grew by 118% over the same period. Plasterboard prices rose by 100% in 2022, and manufacturers have recently announced a further 15% rise in prices this year.

For those set on a refurb, invest generously in detailed structural surveys to assess the work needed. High prices for materials make it doubly important you find a contractor willing to price reasonably.

 

2.       Poor Energy Performance Certificates (EPC)

An EPC assesses the energy efficiency of a property and is rated from ‘A’ to ‘G’, with ‘A’ being the most energy efficient, and ‘G’ being the least.

Certificates are valid for 10 years.

By 2025, all let properties must have an EPC rating of grade ‘C’ or better. Improving an EPC rating up to ‘C’ may not be expensive, but be aware of what is needed to achieve this grade before you buy.

Here are six ways an energy rating can be lifted.

Insulate the walls or roof. Uninsulated properties typically lose up to a third of their heat through the roof.

Install underfloor heating. These systems consume less energy by operating at a lower temperature. However, this only helps if your home has effective insulation.

Invest in double or triple-glazed windows. Windows trap in significantly more heat when they are double or triple-glazed and improve your EPC rating by up to 10 points.

Install low-energy lighting. Using low-energy or LED lightbulbs is a cheap and easy way of lowering energy bills that don’t involve any structural alterations.

Upgrade the boiler. An efficient boiler could significantly improve your EPC rating by as much as 40 points.

Invest in renewable energy. Investing in renewable energy sources such as solar photovoltaic (PV) panels is a good way to improve the EPC rating of your property over the long term.

 

3.       Steer clear of Poor Locations

Location is perhaps the most important factor when buying a home. Avoid properties located on main roads or near railways as noise can deter future buyers, especially young families. Busy streets can lower resale values by up to 10%.

Avoid homes above shops and restaurants as these are harder to a mortgage. It may be convenient to live near that favourite restaurant, but it will also bring the risk of pests or rodents.

Some key questions to ask when buying a home could include:

-          What kind of development plans are in the works for the neighbourhood?

-          Have home values in the neighbourhood been declining or rising?

-          What is population migration like?

-          Is the street likely to become a major street or a popular peak-hour shortcut?

 

4.       Avoid Poor Public Transport

New research further shows that homes within 500 meters of a tube station carry a 10.5% premium compared to those a kilometer away. Homes with good transport connections will retain their value to become more desirable in the future.

In London, there is much discussion over which tube lines are best for commuters. The consensus is that the following three lines offer the best service:

1.       Victoria Line

A fast, convenient line with trains arriving every 100 seconds. Serves major national rail stations such as Euston, Victoria, and Kings Cross.  Brixton to Oxford takes just over 10 minutes.

2.       Jubilee Line

The Jubilee Line has a varied range of stations and connects many other lines across London. Stanmore in North West London to Stratford in East London takes just under an hour.

3.       Elizabeth Line

Named after Queen Elizabeth II, the Elizabeth Line has just opened. It has modern stations with platform-edge-see-through doors. A rapid, East-to-West traverser.

Avoid the Northern Line. Under-investment, unreliable old rolling stock, the “Misery Line” is regularly voted the worst line in London.

 

5.       Look out for Over-Priced Properties

Avoid overpriced properties by these steps:

Consider recently sold ‘comparables’.  Compare prices with properties that are similar in size, type, and condition. You can also use our free instant online valuation tool to find houses in the same area sold in the past.

Investigate the sales history of the property. Sellers often ask for 10% more than they would accept. The longer the property has been on the market, the more likely a lower offer will be accepted.

Ask your real estate agent. A reputable local agent can tell whether a property is sensibly priced.

Instructing the right estate. This is really the master key to finding a home that is right for you. Choose an agent based as close as possible to the property you are buying.

 

6.       Don’t ‘mis-time’ your purchase

The market price is determined by supply and demand.

The months of July, August, and September see more buyers than sellers in the market. This ‘buyer competition’ drives up prices.

In contrast, the months leading up to Christmas are a good time to bargain hunt. Buyers are thin on their ground. Homes stay on the market longer and prices soften as sellers compete to get a sale.


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