Get the balance right when you buy
When you’re choosing the home of your dreams, there is a golden rule to follow – striking the right balance between affordability, availability and suitability.
As a rule of thumb, traditional mortgage lending principles allowed borrowing up to three times your gross annual income. Couples could generally borrow three times the larger salary plus one times the smaller, or two-and-a-half times their joint salary.
The availability and conditions applying to mortgage lending have changed considerable in recent years, but even if you are now able to borrow more, there’s no point buying the house of your dreams if it’s going to turn into a financial nightmare. Your repayments should not be more than 35-40 per cent of your net monthly income.
Having worked out what you can afford - remembering any costs for improving the property - you need to find out whether the sort of property you want is available in the area you want it. It’s likely you will have to compromise on some of your likes and dislikes, so be prepared to be flexible.
The best way to conduct your search is to attack on many fronts, using estate agents, local paper property pull-outs and looking on the internet. If you’re keen on a particular street, put flyers through doors asking if they want to sell.
If you’ve found somewhere you like the look of and it’s in your price range, you need to weigh up a number of factors:
n Accessibility. Are your family and friends nearby? Is it convenient for work?
n Facilities. Is it handy for shops, restaurants, parks and the cinema? Can you park easily?
n Noise. Are you likely to have juggernauts rumbling past your bedroom at 3am?
n Schools. Is the local one any good? Is the home within its catchment area? Check with the school itself.
n Space. If you are buying a home you want to live in for a while, make sure there is space for the family to grow.
n Crime. Find out from the police what the area is like. Have a look at the local paper for a flavour
There are many factors affecting your choice of home, but location should be your number one consideration. You can improve the property but you can’t move it.
Think not just about the attractiveness of the neighbourhood, but how it might change in the future. The price could be affected by:
n New developments. If developers are building in the area it is probably a sign the location is becoming more popular. Your lawyer will check for any plans, but it’s also wise to have a look round the area yourself.
n Transport links. Easy access towns and facilities can have a big effect on the value of a property.
n Restaurants, bars and shops. New restaurants and bars open and close all the time, but they can be a good indicator of the direction in which an area is heading.
A fashionable High Street with trendy shops adds to the appeal of a location.
You can obviously get a good idea of how much a property is worth by comparing with others. However, information on various websites could also help out.
For instance, the Land Registry has detailed information on completion prices; Hometrack has information from estate agents. You can also see get an idea of whether prices are rising or falling in the local area.