August 7, 2020
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As a nation we’re a bit obsessed with looking at houses.
House hunters visit Rightmove and Zoopla around 180 million times a month . That’s 70 visits a second.
Yet only around 90,000 homes are actually sold every month – one every 30 seconds.
You’re probably doing the maths now to figure out that it takes 2,100 site visits for every property transaction. And now you’re probably thinking, ‘yeah, it feels like I’m clocking up somewhere close to that, so… where’s my dream house?’
The truth is, there’s only so long you can flick through galleries, mentally redesign floorplans and fret about local WiFi speeds. There comes a time when you need to get real. Because you’re looking for your first house. And that usually isn’t a dream, unless you’re really lucky it’s a bit of a compromise.
Now that doesn’t mean your first house can’t be brilliant. I still love mine and was sad when it I sold it. But as I write this, I’m left with no regrets, fond memories and about 50% more floorspace.
I think that’s because we took some time to understand what was important to us. Once we knew that, it was a lot easier to not get caught up in an endless Zoopla loop.
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Seems Disney-plot simple right? Figure out what’s important to you and go follow your dreams? But how do you actually do that. There’s so much to think about.
Don’t worry I’m going to give you a full list, but first here’s what the majority of first-time buyers want (plus what upsizers, downsizers and relocators want too – more of why that’s also quite important later)
This gives you a broad idea of what other people think about. But as you can see, it’s hardly cut and dry.
It’s interesting to note, how little consensus there is among FTBs. It’s the only buyer category that doesn’t have a single thing that 60% or more find ‘very important’, which leaves me to believe the other almost 50% don’t think it’s important. So… that’s helpful.
As we were saying before – it’s all a matter of your own priorities. But we must start somewhere, so let’s take our cue from the research; and cover Help to Buy and the wider subject of budget first.
You can negotiate as much as you want, but your budget limits the pool of potential homes available to you more than nearly anything else. Help to Buy and Shared Ownership schemes can really help you get a foot on the ladder, but could limit your choice further.
You’ll probably know from using a simple mortgage calculator or using a more in-depth tool like the Mojo Mortgage Matcher how much you can afford, but how much should you spend is a little different.
Unlike the mortgage calculator this will depend not on income, debt and deposit, but more how much you want it, how much work needs doing on it and how long will you live there.
Generally you want to find the balance between not being so emotionally invested in a house that you pay way over the odds and have financial nightmares for the rest of your life, and not kicking yourself if you don't get it.
Do you want something that you can be comfortable in straight away? Obviously, you’ll want your home to feel like home but try to consider how much work it’ll take before you are happy there. And I can tell you that not all DIY projects are created equal! As a FTB I’d advise you don’t go all Grand Designs. Again, this is probably not going to be your forever home.
Here’s a chart showing, again on average, what makes and loses you money:
Again, it all comes back on what it is worth to you – but these average figures may focus your mind if you know you will be selling up and moving on in three years or so.
And as a first-time buyer, I’d generally suggest you fall on the more prudent side of this scale. That’s because circumstances are likely to change quicker for you than older purchasers. For instance, the average person in the UK now moves home every 23 years – can you really see yourself living in your first home in two decades’ time?
Just like budget, location really focuses your search.
I know when I was looking, I didn’t want to move too far from my friends and family. Others want to be within a certain radius from work. Some fancy being in the catchment area for a good school. The point is, you rarely have the whole UK to choose from.
But that doesn’t mean you still won’t have a choice. For instance, say you wanted to live close enough to your job in Manchester. That’s a potential 1.17 million households across the city centre and hundreds of surrounding towns and villages. Right now, two seconds on Rightmove tells me I’ve got a massive 48,903 properties to look at within 15 miles of Greater Manchester.
We’re all a bit different. Some love a chat, some love a bit of a community and some just love a bit of quiet. Depending on how we feel, we probably all like a bit of all three.
The point is, your house is important, but if the neighbourhood isn’t right for you, you’ll probably grow to resent your choice – no matter how comfy you feel on the sofa. When I catch up with our FTBs at their initial remortgage I always ask them how they are finding their neighbourhood. The ones who really love it all say they spent time getting it right to begin with. Here are some of the highlights.
When I first heard this, it seemed an odd one, but it makes sense. Skips and other signs of renovation show your neighbours are committed to the area. It’s cyclically: the longer people stay in an area, the more they care about it; the more they care about it, the nicer it is; the nicer it is the longer they want to stay.
Get a full picture of life in the neighbourhood. Don’t just rely on your viewings tranquil Tuesday afternoon viewings. Return at rush hour, see how loud it is at night, is the supermarket carpark full on a Saturday morning? The more times you visit, the fewer surprises you’ll have down the line.
The internet’s pretty big. Use it to your advantage, there’s a wealth of information online about your new neighbourhood: public transport timetables, new commercial developments, infrastructural investment, crime rates, a few hours could help you find a potential red flag or another reason to get that viewing booked asap!
I know your house is a home and not an investment, but while you’re looking on Rightmove and Zoopla, you may as well use them to give you a good idea of house price growth in the area. Zoopla in particular makes it very easy. Just type the name of your area in here.
You may not feel like it is right now, but resale value is really important in a first home. It’s often advised that it’s better to buy the cheapest house in neighbourhood where house prices are increasing than the best house in an area on a downward curve.
Now the arguments can begin!
Ok, so far we’ve dealt with the two biggies: budget and location. These are often out of your control, and that sounds like it's a bad thing, but once they’re out of the way, you’ve left with something even worse: choice.
As before, it’s useful to see what other people prioritise in a new home. This list is fairly extensive, but can never be definitive. Only you can know what’s important to you.
A tip on how to put your finger on what’s important to you? Try to think about on how you want to live, not the house you want to live in.
A place with swanky sliding doors leading to a beautiful landscaped garden and ornamental pond seems beautiful, but are you an outdoors person? Will you enjoy spending your free time maintaining it? Will you even be home enough during the day to appreciate it?
If you love to cook and entertain is a sleek, minimalist, stainless steel breakfast bar what you’ll want from a kitchen?
If you enjoy eating out, do you really need a dining room?
Love clothes? Can a room be a walk-in wardrobe?
Another good piece of advice is to focus on the floor plan and not the finish. Even if you don’t want to spend too much money, you’ll find it quite easy to switch up tiles, paint, and roll out a new carpet or two. However, adding even a few square foot or smashing down a load-bearing wall gets expensive and time consuming.
It may be that one house jumps out at you. You just get that feeling everyone talks about and you know its perfect as soon as you show up for the viewing. The reality is that doesn’t always happen and you need to make some tough decisions.
I’ve tried to make this as rational a process as possible. Choosing a house, sorting a mortgage, moving, it’s all massive upheaval and can be quite emotional. But here’s nothing wrong with letting a bit of emotion creep into your decision if that’s what you want. You’re buying a house not a pair of socks! You may only do this 2 or 3 times in your life.
If there’s a little sentimental attachment to a certain area, or you just love the idea of restoring the period freestanding bath factor them into your decision. Pay particularly close attention to that initial feel you get on viewings (more on viewings and what to do on them here.)
Only you will know what you like and what you need. But it’s important you make the distinction between a like and a need.
Then here’s some pseudo-science.
A quick Google unearths loads of decision-making formulas. Here’s one that’s stood the test of time and quite similar to the process that most people do when picking a house anyway. It’s a much simpler version of Peter Drucker’s 1967 Theory of effective decision making.
You’ll probably make a list of pros and cons, the clever bit of this is that you assign a way to each depending on how important it is to you. Furthermore, every potential new house is judged on your absolutely essential criteria: your must-haves.
Only you will know what you like and what you need. But it’s important you make the distinction between a like and a need.
Here’s an example of a great house, it has loads going for it, but it doesn’t hit the must-haves, so, in theory, you shouldn’t be making an offer on this house.
You’re looking for the house that has all three must-haves and the highest overall score.
It may not be necessary for you, but if you want to try it, you can download that template here.
If you didn’t know before getting 2,000 words deep into this guide, where a new house is concerned there’s a lot to think about. And I’ve only been looking at it from one person’s perspective! If you’ve buying as a couple, you can throw two different opinions into the mix.
Hopefully you and your partner are fairly aligned on the important stuff, but it’s not always the case. Sometimes there’s one of you with stronger opinions and another who’s more inclined to go with the flow, again, that doesn’t always happen.
If you’re butting heads you really need to agree to a process. Something my fellow Mojo adviser Stu and his partner did when they were buying their last house was make separate lists of their must-haves and things they’d like.
The aim is to get a few matches on the must-have list, then anything else drops into the nice-to-have list. If you’re using the template above, you could assign more value to nice-to-haves you both want.
Stu found that when they started their property search on common ground, they found it easier to compromise to make a decision.
Honestly, it’s normal to have a bit of trepidation going into a huge decision like buying your first home. Even if you’re on home number 3 or 4, you can worry it won’t work out.
Equally, buying a new home’s massively exciting. It’s a huge change in your life and tempting to whack down an offer in the first house that even matches some of your criteria.
But hopefully this read has helped you get to grips with all the things you can think about and shove them in some sort of order for you. Remember the dream house doesn’t really exist, but finding one that you can wake up in every day and be a little bit happier in does.
I hope you find a good one!
And if you did, I'd be more than happy to help you find your first-time buyer mortgage too!
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