6.10.20

Why Should First-Time Buyers Avoid Old Properties?


Ask around and you’ll hear old properties are the best places to build a home. Apparently, they are designed and constructed better, which means they’ll have fewer maintenance issues and they’ll last for decades. 

This may be the case, yet it’s wrong to generalise. In reality, there are pros and cons to every purchase, especially if you’re a first-time buyer. As somebody who is attempting to step on the initial rung of the real estate ladder, it’s essential to ensure that your new home is the best you can get for your money.

Therefore, as well as analysing the pros of old properties, it’s vital to evaluate the downsides too. By doing this, you’ll get a broad picture of which house is right for you and your family, allowing you to make an informed decision that will stand you in good stead for the future.

Here are the elements first-time buyers should consider before signing on the dotted line.

The Money
On average, old homes are more expensive than new houses. This is true for several reasons, yet the main one is the draw of retro buildings. People love the old-fashioned brickwork and high ceilings and will pay for as a result. Unfortunately, anyone who isn’t on the property ladder is less likely to have the funds to compete if there is a bidding war.

New homes are perfect for first-time buyers because, even if the initial investment is higher, the running costs are typically lower. For example, there is less maintenance work involved, so you can move straight in without spending extra resources. Plus, they are built to retain heat and use less electricity, making them eco-friendly.

Houses that have a low carbon footprint require less energy, which equates to cheaper monthly bills. The same can’t be said for old properties as they are notoriously drafty and poorly insulated.


A Mortgage
Of course, a house’s value means nothing if you can’t convince a creditor to lend you the money. After all, 99% of homeowners apply for a loan from a bank to borrow up to 90% of the cost of owning a house. And, recent research shows how a 10% deposit isn’t enough for first-time buyers any more.

If you’re attempting to invest in a property, you’ll likely require help from various sources, including parents, lenders, and anyone else who’s happy to help! Thankfully, new builds are partly made to assist people without homes who have limited resources get on the ladder. Therefore, you may be eligible for everything from the Help To Buy Scheme (shared ownership, equity loan, or ISA) to a springboard mortgage.

However, a typical stipulation is that you must buy a recently erected property, which means that old properties are out.


Warranties
A guarantee isn’t something you consider with a home. When you buy a brand new car or piece of jewellery, you’ll double-check the warranty to ensure there is a backup plan. Concerning a house, it’s almost accepted that they don’t exist, so there’s no point asking in the first place.

Sadly, this attitude costs buyers a lot of money. Existing homes aren’t equipped with warranties since the chain of ownership is big and varied. An ordinary person isn’t going to provide a service they can’t afford, yet property developers are different. Because developers are big companies, they are happy to guarantee new build homes and the contents. Some features are exempt, like any warranty, but at least you get some form of coverage.

Regarding an old property, you buy it as you see it, which is very risky if you can’t trust your surveyor or architect to highlight potential problems.

The Hassle
As a first-time buyer, you have a lot on your plate. Not only must you obtain a home loan, which is tough, but you need to deal with solicitors, estate agents, and owners. Although the former is perceived as the worst to deal with, it may be the homeowner that is the most challenging obstacle.

Whether it’s trying to raise the price, conceal vital information, or taking their sweet time to finalise the deal, they will make life a struggle. If you’re resigned to spend the next six months fretting about the purchase, you’re mistaken. At least with a developer, you know where they stand as they have profit margins and will sell for a certain price.

Once you hit the amount, the stress is minimal as developers want the sale completed ASAP.

Are you a first-time buyer? How do you see the debate?

4 comments:

  1. Some good points thanks!

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  2. Some good advice here - many thanks :)

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  3. Anonymous13:54

    Margaret Clarkson
    Good information, thank you.

    ReplyDelete
  4. Good points there. I started on the property ladder with a small 3 bed terraced, which I still think is the best way to go. Low maintenance and affordable....

    ReplyDelete

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