10 ‘ Hot Tips’ to Consider When Buying A House
Caveat emptor, ‘ Let the buyer beware ‘, has always been the maxim with property transactions and with increasing property prices and more expensive pitfalls that lie ahead for the unprepared house purchaser it is even more relevant today.
I acted as a Chartered Surveyor, estate agent and valuer for many years as a partner with Strutt and Parker selling country properties in the West Country. Over the last eight years I have helped a number of clients find and purchase properties in the South West through Recoco Property Search.
I list below some of the important matters that buyers should be aware of and suggest how to avoid potentially expensive mistakes.
Structural defects
For most people the purchase of a house will be their most expensive investment. With the increasing cost of building materials and tradesmen such as stone masons, carpenters and electricians, checking whether a property has structural defects before committing to a purchase is a sensible thing to do.
Chartered Building Surveyors can be instructed to inspect and report on a property’s structural defects and to give recommendations on how to remedy the problems revealed and the likely cost.
Major defects such as subsidence, heave, dry rot, foam insulation in roof spaces and defective drainage are all significant and very expensive problems to put right.
2. Listed Buildings
All property purchases involve the buyer’s solicitor implementing ‘ searches ‘ of local authorities and certain utility companies to reveal any factors that are likely to affect the property. A search will reveal if a property is a listed property and whether it is Grade 1, Grade 11* or Grade 11.
Properties listed have restrictions on what alterations or extensions might be permitted and according to which category of listing as to whether the local authority can deal with a listed building application or whether Historic England need to be consulted.
I advise that the buyer’s solicitor ensures that the property in its current layout complies with the Listing details and that there is Listed Building Consent for any alterations that have taken place to the property.
Any proposed alterations that a buyer might wish to make should be discussed fully with a Historic Buildings Officer or experienced architect.
3. Chancel Repair Liability
Chancel Repair Liability is an historical burden and legal obligation requiring some property owners to contribute towards the cost of repairs to the chancel of their parish church. As one can imagine such repairs will be extremely expensive.
Even if your house is not old, but has been built on land that is subject to this legal liability, you could be caught.
Therefore you should ask your solicitor to request a ‘priority chancel repair ‘ search on your behalf to avoid an unexpected, unavoidable and expensive demand for a large financial contribution at a later date.
4. Japanese Knotweed ( Reynoutria japonica ).
This is an extremely persistent and pernicious herbaceous perennial weed originally introduced to this country as an ornamental plant and it has become a real problem for properties where it grows.
This invasive plant is notorious for its ability to spread from tiny rhizome fragments, and its resistance to traditional control methods, making it a challenging and long-term problem to manage.
This non-native weed can even grow up though concrete and can then start to cause significant structural problems in houses, garages, outbuildings and car parking areas.
Some banks, building societies and other financial institutions will not grant mortgages on properties known to have Japanese Knotweed.
Although removing Japanese Knotweed is difficult as it is such a persistent weed it is possible to manage and control the outbreaks and in time it can be potentially eradicated from certain areas.
I know of some companies that specialise in this area who will inspect a property and its grounds, prepare a professional report and recommend how to manage the areas where it appears. I have recommended one particular specialist company to inspect and report on both a house and a farm purchase for my clients before they proceeded with a purchase.
5. Restrictive Covenants
Some properties will be subject to a restrictive covenant. This will be recorded and shown on the title deeds to the property that you are purchasing. Your solicitor will draw this to your attention in their report to you before you exchange contracts and are committed to completing the purchase.
A restrictive covenant is a legally binding agreement that limits the use or development of a property in one way or another. In effect it imposes a burden of compliance on the subject property and has a benefit to an adjoining property.
Commonly found restrictive covenants are ones that prevent the owner from building any additional structure on the property, extending the existing building or changing its use from say residential to business use.
If you intend to buy a property which is subject to a restrictive covenant you should discuss this with your solicitor to ensure that you are completely clear about the implications and restrictions that such covenants impose on the property that you are wishing to purchase.
6. Rights of Way
These fall into two categories:
Public rights of way; for example, a public footpath, public bridleway or byway.
These are legally established routes over which the public have a right to pass on foot, horse or other traffic such as bicycles and motor bikes.
The existence of a public right of way passing over or adjacent to a property that you are intending to purchase will be revealed in the search of the local authority that your solicitor will undertake on your behalf.
You need to be aware of the extent to which any public rights of way affecting the property are currently used or could be used as this may well have both a detrimental effect on your enjoyment of the property and its value.
2. Private Rights of Way
These are rights of way over a property in favour of certain people such as a right of way for agricultural purposes only for a neighbouring farmer to access a field on the other side of the property that you are buying.
In villages, it is common to find old rights of way that can still be exercised for a nearby house to pass through your garden to get to a well or other water supply.
These rights of way will be shown on the title deeds to the house you are buying, and you should discuss the implications with your solicitor before signing the contract to purchase.
7. Private Drainage
Many rural properties are not connected to mains drainage and will have a private drainage system. This can be an old cess pit, a septic tank or a more modern sewage treatment plant.
You must be fully aware of the type of drainage system connected to the house you wish to buy.
It may be that a private drainage system is shared with an adjoining property or that a soakaway from a septic tank goes on to land you will not own.
Under the new Environment Agency General Binding Rules, if the owner of a property has a septic tank that discharges directly to a surface water (ditch, stream, river, etc.) they must replace or upgrade the septic tank system to a complete sewage treatment plant as soon as possible, or when they sell the property.
Your solicitor should ask detailed questions of the solicitor acting for the seller of a house in the pre-contract enquiry stage about the drainage system, its condition and when it was last emptied etc.
Commissioning an inspection and reporting on a private drainage system from a specialist drainage company before purchasing is prudent. A good report should highlight both any problems with the private drainage system, such as pipes blocked or partially blocked with roots, or an ineffective soakaway system and give costings to remedy the defects.
If a private drainage system needs to be replaced because it is either not working or not compliant with the Environment Agency’s regulations, a budget figure of at least £20,000 should be set aside for this cost.
I also always advise my clients wishing to purchase a property with a private drainage system to request that the seller has the tank emptied before completion.
8. Insurance.
Buyers should be aware that they are responsible for insuring a property they purchase from the date of exchange of contracts and not from the completion date.
It is therefore imperative that arrangements are put in place to obtain both complete insurance coverage for the property that you intend to purchase and that you have obtained comparative quotes for that insurance cover well before the date for exchange of contracts.
Property insurance has recently become much more expensive, and insurance companies are becoming much stricter about whether they will provide cover for certain aspects of a property and any conditions that they may impose.
Thatched properties are a case in point and it is prudent to check with insurance companies that they will insure a thatched property and at what cost. I know that some companies will not insure terraced thatched houses or cottages.
I was told this week by the owner of a thatched Grade 11 listed house that for many years they have enjoyed open fires in the ingle-nook fireplace of their drawing room. Their insurance company have recently insisted that their chimney is lined with a metal flue and that they must now install a wood burner and not have any more open fires.
Interestingly another insurance company will not now allow wood burners in thatched properties for which they provide insurance cover as they get much hotter than open fires and can cause chimney and thatch fires.
Some insurance companies will not provide cover for houses that flood or have major structural defects such as subsidence or heave.
Cavet Emptor thus fully applies in this complicated and expensive area of insurance.
10. Asbestos
Asbestos has been used as a building and insulation material in a number of house and farm buildings for many years and it may still be in situ in a property that you are interested in purchasing.
There are various types of asbestos with some types harmless to health but others seriously dangerous to health. The worst outcome from exposure to the wrong type of asbestos can result in the cancer Mesothelioma.
It is, therefore, imperative that if there is any chance of asbestos being present in a house or farm that you are considering purchasing, this be checked by a qualified Chartered Building Surveyor.
The surveyor will inspect the property and if he discovers the presence of asbestos in the property he may well recommend that a specialist asbestos surveyor does an inspection and report as to the type of asbestos he finds and the action to be taken and the likely costs of its specialist removal.
I have commissioned a number of asbestos reports for Recoco clients purchasing both houses and farms.
11. Stamp Duty Land Tax (SDLT)
This is a government-imposed tax payable on the purchase of a property, the amount of which varies according to the purchase price of the property.
The stamp duty rate changes from time to time and the current amount payable ranges from 5% to 12% of the purchase price, depending upon the value of the property bought, the purchase date and whether you are a multiple home owner.
If you purchase a property which qualifies for ‘ mixed use ‘ relief, for example, if you are buying a house with 100 acres of agricultural land, you will pay less SDLT if you can prove to the Revenue that the 100 acres is being farmed and not just for ancillary recreational use with the house.
The quantum of SDLT now payable is considerable, especially on higher-priced properties. Before committing to a purchase, advice about SDLT from both your solicitor and accountant is essential.
They can advise you on the amount that you will have to pay in addition to the purchase price for the property, when you will need to pay this, what reliefs, if any, might be available to you and if you purchase a second property before you have sold your current property what you may be able to reclaim from HMRC and within what time period.
If there is one most expensive area of property purchasing where Caveat Emptor applies more than others it is in regard to your SDLT liability which no buyer can avoid paying.
Conclusion
With all of the above factors relating to property purchase as a Property Search Agent with Recoco Property Search I have considerable experience in helping buyers navigate some of the potential problems and costs.
I am there to help.
Robin Thomas