The 7 biggest mistakes homebuyers regret… from ‘fix fail’ to hidden charges – and how to dodge them

YOUR home is probably the most expensive purchase you’ll make in your life – so you don’t want to have any regrets. Yet more than a third (37%) of homeowners say they have regrets about the home they bought, according to the HomeOwners Alliance. It’s even more striking among younger buyers, with more than two-thirds feeling they made a mistake. That means millions of us aren’t completely happy with our homes. Sign up for the Money newsletter Thank you! So how can you avoid falling into these common home buying traps? Rachel Geddes, strategic lender relationship director at Mortgage Advice Bureau, says: “A bit of preparation now can save any potential regret later. “The good news is that most of the common ‘regrets’ people have are avoidable from the outset if you know what to look out for.” These are the most common mistakes homebuyers make and how to avoid them… Not being able to afford your mortgage bill Don’t land yourself with a monthly mortgage bill that’s more than you can afford Credit: Getty One of the biggest problems for homeowners is getting landed with mortgage bills they can barely afford. It’s easy to fall for your dream home at the top of your budget range and decide to accept a high monthly mortgage bill. Most read in Money But you need to be prepared for what could happen if your circumstances change or your bills increase. David Hollingworth, associate director at L&C Mortgages, says: “Just because a lender will offer a certain amount doesn’t mean that it’s right to apply for the maximum amount. “Interest rates can change over time so what may feel like a manageable amount now isn’t guaranteed to remain so, for example if there’s a sharp spike in interest rates.” An increase in interest rates could potentially add hundreds of pounds to your monthly payment. For example, 750,000 households who took out mortgages five years ago are facing an average repayment increase of around £170 a month when they roll off their current loans this year. You could avoid getting landed with unmanageable mortgage bills by using an online calculator to see how higher rates could affect your monthly payments. Fixing your mortgage rate can also protect your payments from rising for a set amount of time. Mark Harris, chief executive of mortgage broker SPF Private Clients, also recommends looking for a whole-of-market mortgage broker who can find the best deal for your circumstances. They’re not tied to a single bank or a fixed list of providers so you’ll have a wider choice of interest rates and products. Entering a dodgy leasehold contract Flats are usually leasehold properties so you should check the detail on the contract carefully Buying a leasehold property means you buy the right to live in a home for a set period of time, but you don’t own the land it’s on. Most flats are leasehold, so buyers in some cities have little choice but to go for it – however, many get caught out by expensive issues. For example, escalating ground rents, short leases and unpredictable service charges can all end up adding large amounts to your housing costs. These can often be hidden in the small print of a leasehold contract so be sure to go over any documents carefully and ideally with a lawyer. The average annual leasehold service charge has now hit a huge £2,300, according to Hamptons estate agency. Charges such as the service charge can often be unpredictable from year-to-year making it hard to budget for. It also means the property can become harder to sell or remortgage. Leasehold issues have contributed to a current flats crisis in the housing market. New data shows owners in Sheffield, Birmingham, Leicester and Newcastle are routinely selling for around £40,000 less than they paid. This doesn’t necessarily mean you need to avoid leasehold, but you should understand what you’re signing on for. Ms Geddes says: “This is somewhere an adviser and a solicitor working together really earn their keep. “When your property pack comes through, take the time to read everything relating to the lease: how long is left on it, what your obligations are, and what the rules and terms actually say. “Don’t wait until you’re further down the line to ask questions.” Choosing a property that’s difficult to sell Homes with unusual construction features like thatched roofs can be harder to sell Credit: Alamy If you’ve picked up a bargain property, there might be a reason for it. “If a property has been sitting on the market for a long time, ask yourself why – is it a hard sell?” says Ms Geddes. Ex-local authority flats, buildings with cladding issues, properties above shops or homes with an unusual construction type can all be difficult to sell. That means you could end up trapped in your home for years or be forced to take an offer that’s less than you paid for the property. Nicholas Mendes, mortgage technical adviser at John Charcol, says: “It’s worth asking early on whether a typical mortgage lender would have any concerns about the property, since if a lender would hesitate, so will most buyers.” You should also consider who is likely to buy the property off you down the line and what they might be looking for. Don’t underestimate the power of keeping your home well maintained and up-to-date, as this will matter a lot when you come to sell. Picking a bad location You could face problems like living near a construction site or having noisy neighbours Credit: Getty Choosing a home in a poor location can make your life miserable. You could be dealing with problems like noisy neighbours, nearby construction work, flood risk, poor transport links or an undesirable area. Plus, the location can be off-putting for future buyers. Ryan Etchells, chief commercial officer at Together, says: “Even a beautiful, well-priced house can struggle if buyers perceive the surrounding area as inconvenient, noisy, unattractive, or risky.” Get a better idea of the location by viewing the property at multiple times of day. You could try visiting during the evening and on the weekend too to get a proper sense of noise, parking and traffic. Also check flood risk, planning applications nearby and transport links. Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “If you are a first-time buyer, then generally it is a relatively short-term purchase so you may only need to consider what might happen in the next five years or so. “If you might want to rent the property out at some point, consider whether it would suit a prospective tenant. The proximity of a train track might not bother a tenant who is only going to live there for a short time but may be more of an issue for a potential buyer who plans to live there for many years.” Fixing for the wrong length of time You could be hit with an early repayment charge if you try to leave your mortgage deal Credit: Getty When you are choosing how long you want to lock in your mortgage re wary of making a fixing fail. Usually, mortgages are fixed for two or five years but you can also choose longer terms. Mr Mendes says: “Buyers often pick a two or five-year fix without thinking about what else is happening in that window, a possible job move, a growing family needing more space, or wanting to sell before the fix ends.” If you choose to get out of your fix early, you could face a hefty early repayment charge. This is usually between 1% to 5% of your outstanding loan balance, so it could run into thousands of pounds. Instead of automatically picking the lowest rate, choose a term length based on where you see yourself in the next few years. Alternatively you could consider porting your mortgage, which means you can transfer your existing mortgage deal and interest rate if you buy a new property during your fixed term. It’s worth speaking to a mortgage broker if you are unsure about how long to fix for. Skimping on the survey A surveyor can help you avoid any expensive problems down the line Credit: Alamy Choosing not to do a survey before you buy your home could cost you much more in the long run. Property surveyor will check for any issues with the home, including structural defects, damp and roof problems. If they identify any problems, you can either have the cost taken off your offer for the property or choose to pull out of the sale altogether. The amount you spend on the survey will depend on the property’s age and condition, but it could be between £300 and £1,500. Experts warn that if you skip a survey to save a few hundred pounds, you could find six-figure problems after you’ve moved in. Mr Hollingworth says: “It’s better to get a more detailed level of report or even a full structural survey so that you know of any issues that could be of concern. “A more detailed report will come with a cost but it could be money well spent and even allow you to negotiate on price if there’s some work that will need to be done.” Poor broadband or mobile signal Make sure the broadband works well, especially if you’ll be working from home Credit: Getty Some rural areas still suffer from dodgy WiFi or mobile signals. Over 500,000 properties across the UK have broadband under the national minimum standard, according to Ofcom. Rural areas are seven times more likely to suffer with these near unusable speeds. Mr Mendes says: “With so many people working from home now, this genuinely catches buyers out, particularly in rural or edge of town locations that seemed fine on a weekend viewing.” You can check online to see what a property’s broadband speed is before you buy. Just put in the address on the Ofcom Broadband and Mobile Coverage checker to see maximum available speeds and network coverage. You should also test mobile data from different rooms and the garden during the viewing. Plus, you could run a quick speed test using Speedtest.net on their WiFi while you’re there. Comment now