Home buyers sleepwalk into property nightmare

Home buyers are failing to protect themselves from property nightmares with fewer than one in four taking simple steps to properly check their dream house before they buy it, according to new research by AA Legal Services.

The average home in the UK costs £185,000 and Brits owe more than £340billion in mortgage repayments, yet many home buyers are putting every last penny towards covering the cost of their mortgage payments by cutting corners on checking the quality of what estate agents are presenting them with.

Of the 1,200 British home owners questioned by AA Legal Services, just one in four (28%) had commissioned a structural survey of their property (beyond the mortgage valuation) or checked for flood risk. Fewer still (14%) had sought an independent conveyancing service.

The research also shows that home buying mistakes go far beyond financial oversights. Despite a fivefold increase in complaints about noise from rowdy neighbours since the 1980s, just one in six (15%) homebuyers bothered to meet their prospective neighbours before buying.

Failing to Consider Future Costs

Fewer than one in four home buyers considered the future costs of their purchase before completing the sale; just 23 per cent commissioned a comprehensive survey, only 29 per cent considered the cost of council tax and just 21 per cent shopped around for an insurance quote on the property.

Building Backlash

Despite potentially escalating costs of building repair work, fewer than one in five (18%) home buyers checked the flood risk at their new property, just one in ten (11%) checked the drainage and only one in four (28%) paid for a full structural survey.

Nightmare Neighbourhood

With just one in six (15%) home buyers taking the time to meet their prospective neighbours, fewer still (11%) investigated levels of noise pollution or visited the area during rush hour (18%). Just one in four (26%) checked to see if any building works were planned in their local area, although 42 per cent did research the local area before buying.

Commenting on the research, James Molloy at AA Legal Services, points out that moving home is one of the most important life events, and the biggest one-off financial investment most people ever make. “I’m very worried that so few take steps to protect their investment and ensure that their interests are represented.

“With home buyers stretching themselves to the financial limits to afford their home, many are cutting back on the relatively low costs of basic legal and social inspections,” he says. “New home owners who do not carry out basic checks, face discovering too late that their dream home could actually be a financial time bomb.

“As part of an opening up of the legal services market, the AA has established AA Legal Services to provide legal solutions tailored to modern consumer needs. By talking directly to home buyers as part of our Safe as Houses campaign we hope to demystify the legal processes involved in home buying, encouraging home buyers to seek credible independent advice.”

Further Findings

Low Income Buyers: Low income home buyers, investing in homes worth under £100,000, are the most likely to be putting themselves at risk. Just 6 per cent sought independent conveyancing when they bought their home and only 17 per cent looked for an independent survey.

Young Home Buyers: Young home buyers, aged 18 to 24, taking their first step onto the property ladder, are the most likely to consider the costs of insuring their new home (40% compared to 21% nationally) and look into council tax rates (45% compared to 29% nationally). However, when it comes to getting to know the area, they are more likely to check out the local pub and nightclub (26%) than make an effort to meet the neighbours (12%) or consider any planned building works (21%).

Tips for home buyers from AA Legal Services

Take your time: Buying a home is one of the biggest decisions you will ever make. If you are being pushed to make a purchase decision, research the area before you find the property. Check out the local facilities, council tax and local development plans.

Seek independent advice: Don’t just go with the advice of the estate agent and their allied service providers. Remember that their interests lie in completing the sale on behalf of the vendor. They may not provide the most comprehensive, independent advice. When looking for independent advice, shop around and ask questions.

Don’t cut corners: When buying a home, trying to keep costs down is understandable. However, remember that in the grand scheme of things, ensuring that your property has been comprehensively surveyed before you agree the purchase could save you a lot of money in the long run – especially if a structural fault is discovered which means you can walk away losing just the survey cost – not potential expensive remedial works.

Look into the costs before completion: There is a period between agreeing and finalising a sale, when buyers have an opportunity to look into possible costs following the purchase. During the conveyancing process, take time to get comparative insurance quotes on the property and any work which may need to be done. You can then ensure that these are taken into account in the final contract and there will be no nasty surprises to follow.

If you’re not sure, ask your solicitor: If you discover something about the property which may become a problem, for example planned building works in your area, bring this up with your solicitor. Most issues of this nature should be covered in a search, but it’s worth bringing raising them before signing the contract to make doubly sure.