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This is a very broad question and one with many answers!
There are three major factors to consider before embarking on any such project - your long-term plan for the property, the scope of the work you’re prepared to carry out, and your budget for both buying the property and to cover the renovation costs. All of these will have an influence on where and what to buy.
Whether you’re looking to create your ‘forever’ home, planning to sell with the aim of making a profit, or generate an income by renting it out, there are some things you can’t change so make these a priority:
Location – a very apt principle to remember here is that it’s better to buy the worst house on the best street than the best house on the worst street.
Outside space – does it fit your needs or those of others who might live there? Is there space to extend without taking too much of the garden? Is there parking or scope to add it?
The local area – do any of the nearby properties suffer with subsidence or is there a history of flooding, for example? Also, have any of the neighbours extended or converted the loft space or garage? This may give an indication of the likelihood of gaining permissions.
Restrictions – is it listed, leasehold, or in a conservation area?
When looking at specific properties, look for signs of damp, structural damage such as cracks, and the state of the roof as these can be costly to repair. Think about their renovation potential and whether that fits within your scope of work and budget. Would you be able to carry out most of the work yourself or would you need to enlist the services of many tradespeople? Does it need new windows, a new kitchen, bathroom, heating system, complete rewire? Could you adapt the flow of the layout or add bedrooms or bathrooms, or could you extend with a fabulous new kitchen family room looking out onto the beautifully landscaped garden?
Do a cost vs potential income analysis. If the project is for profit then there will be an optimal spend:reward level, so keep an eye on your budget and try not to get carried away. If you’re creating your ‘forever’ home, you may want to go all out with wow features as you’ll enjoy them for – well, forever.
To find suitable properties, register your details and build a rapport with local estate agents and auction houses – this will ensure you’re ‘in the know’ about what’s coming to the market, and their expertise may be useful further down the line.
In summary, think carefully about the purpose and scope of the project, and make decisions in line with those objectives. Do your best to stick to the budget, and factor in any Capital Gains Tax on profits. Keep your head and it could be a very exciting, interesting, and rewarding experience.
Give us a call on 01392 204800 to discuss this further – we’d love to help!
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A flying freehold applies where part of one property – for example an upper room or loft space – physically extends over another. This means that the owner of a flying freehold does not actually own the structure which supports that part of his or her property. They are therefore entirely dependent upon the goodwill of the owner of the adjoining property for its upkeep and structural integrity. A flying freehold can also exist where part of a property sits over a communal access area, like an archway.
Of course, this sort of thing happens all the time with houses that have been converted into separate flats, or purpose-built apartment blocks. These are invariably leasehold, so there is always a freeholder somewhere who retains the power to compel each leaseholder to maintain their part of the communal fabric.
Fortunately, they’re relatively rare in freeholds in most parts of the country these days. Nevertheless, they do persist in some areas, particularly with older properties.
In practice, flying freeholds have been around for donkeys’ years without causing anyone any trouble. However, because they are different to the ‘norm’ and something of an anomaly, solicitors, banks and building societies tend to be rather wary of them.
So, you fall in love with the property you’ve seen and want to buy it… well, while it’s undeniable that the flying freehold could complicate matters and your solicitor will certainly want to check it out thoroughly, however, most of the difficulties associated with flying freeholds are easily surmountable – for example, by taking out indemnity insurance.
So, if you’re faced with a flying freehold on a property that you really can’t resist, my advice would be to go for it.
If you’d like to discuss this in more depth, give us a call on 01392 204800.
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Well, that depends on your circumstances.
If you have a lump sum - of savings, or from an inheritance or work bonus, etc - the first thing to check is whether your mortgage is subject to any annual limits; this is the amount you can overpay each year without incurring a fee, which is typically 10% of your original mortgage value, but it varies from lender to lender. If the lump sum is above the annual limit, you could keep some back for the next year. Obviously, paying a lump sum off your mortgage has an immediate effect on the balance and therefore the amount of interest you pay as well as the term of your mortgage.
Making monthly overpayments is another option. The annual limit will still apply, so be mindful of that. This would have a rippling effect on your mortgage, reducing your balance quicker and therefore reducing the amount of interest you pay over the term. If you plan to do this on a regular basis, it’s a good idea to let your lender know.
You could remortgage with a shorter term, which would lower the amount of interest you’d pay over the term but would commit you to an increase in your monthly payments. Before doing this, you must be confident you can afford a higher payment every month.
Some lenders offer an ‘offset mortgage’, which links your bank savings account to your mortgage – they offset one against the other and only charge interest on the difference. Check arrangement fees and interest rates though.
Before you do anything, check that paying your mortgage is right for you. Yes, there are many benefits, including lower interest rates for lower loan-to-value ratios and being mortgage-free sooner than you otherwise would have been. However, if you have any loans or debt at a higher interest rate than your mortgage, it makes sense to prioritise those. If you don’t have a pension, that might also be something to consider. If you have a lump sum, look at savings interest rates and if they’re higher than your mortgage rate then it could be more profitable short term to lock the money into savings, but bear in mind that interest on savings is taxable.
It goes without saying that, if your current mortgage deal is about to expire, make sure you switch to another deal to avoid being automatically transferred onto your lender’s Standard Variable Rate, and always pay any remortgage fee upfront as you’ll pay interest on it if you add it to your mortgage.
So, it’s not an easy question to answer as there are so many variables. My advice is, look at all angles before committing to anything, speak to your lender, and good luck in your quest!
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People may give you differing answers to this question, however, my advice – and that of other property professionals – would always be to put your house on the market first.
It obviously wouldn’t do any harm to look at prices and check that it’s possible to buy what you want with your expected budget. However, any offers you make would almost certainly be rejected until such point that you are ‘proceedable’ – that is, you are in a position to proceed with the purchase. And if you need to sell your house to be able to buy, you’re not in that position until you have agreed a sale on yours.
A cash or first time buyer for your home would put you in the strongest position to make an offer on something else because, assuming their finances are in place, they are proceedable, therefore putting you in the same position. You would also have strength as a buyer if your home was under offer to someone with a proceedable buyer for theirs.
Different agents and sellers have varying viewpoints - some won’t even entertain allowing viewings by buyers who aren’t able to proceed straight away, and at the other end of the scale, there are some out there who would accept an offer and be happy to wait until such time that their offeree had a buyer – probably though for a set amount of time, or until an acceptable offer was made by someone in a stronger position.
It also depends on the state of the market. In a buoyant market with greater demand than supply, there is a greater chance of a buyer being found in a shorter amount of time than in a market when supply is greater, so more sellers would be inclined to wait.
And individual circumstances are also an influencing factor - some sellers need to move as soon as possible and others are in no hurry.
Fact is, you can’t buy until you’ve sold, so find a buyer first and put yourselves in the strongest possible position. You’d be sorely disappointed if you found your dream home and couldn’t buy it. With an offer on the table, you’ll have a more accurate idea of your budget too.
If you’d like any further advice, give us a call on 01392 204800.
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These two values are indeed very different things. The market value of a property is what you would aim to sell it for, whereas the insured value is what it would cost to rebuild it in the event of a major fire, accident or subsidence, for example.
The market value is almost always higher because the insured value doesn’t need to consider the value of the land on which the property sits. However, in the case of listed buildings, properties made from non-standard materials, or those with special architectural features, the rebuild cost could actually be higher.
Insurance companies usually provide an estimate and increase their valuations annually in line with inflation. It’s important to tell them if you’ve extended or improved your home so they can take this into account.
We would however advise you to check the insured value yourself every few years, just to make sure you have adequate cover. There are two ways of doing this – the most accurate way is to hire a chartered surveyor to carry out a professional assessment, or the less costly option is to use the ABI (Association of British Insurers) BCIS (Building Cost Information Service) Residential Rebuilding Costs calculator at https://abi.bcis.co.uk/.
You’ll need to register, measure the gross external floor area of your home, and enter that as well as a few other details into the calculator. Once you have the result, you can compare it with your level of cover and ask your insurer to make any necessary adjustments. It might mean you pay a slightly higher premium, but it’s worth it for the peace of mind that there wouldn’t be a shortfall should you need to make a claim.
To find out the market value of your home, contact your local estate agent. We’d be happy to provide you with a market valuation free of charge and without obligation – just give us a call on 01392 204800.
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