House Buying Experience

• FORUM
• Email this
  to a friend
  

• Submit Your
  Own Prices
  
  
• Sign Up to
  Our Newsletter

By Alastair Taylor

My House Buying Blog

10 April 05

I have finally made a decision today. I am going to buy a house in the Cambridge area. I know that the housing market could well sink like a lead balloon, but I'm willing to take my chances. Besides, by the time that I actually BUY a house I am hoping that the housing market crash will be at least part way through. I don't mind not buying at the bottom, I just don't want to purchase a house right at the top of the housing market boom!

This blog has been set up to trace my efforts in purchasing a house. I don't know how long it will take, but I'm guessing at least 6 months by the time I have done all the research, looked at all the houses, had several offers fall through, and finally end up with my dream home, or pile of broken bricks.. I hope that in the end this blog will give everyone reading it a good idea of the highs, lows, pitfalls and opportunities of buying a house in the UK.

Wish me luck!

What Mortgage can I afford?
17 April 05

So what can I afford without the threat of house repossessions? Well I have done the sums, looked at my income, bills, and the price of houses, and I think that around a 150K house would be the absolute maximum for me, with around a 120K mortgage. Over 25 year this gives me repayments of around £700 a month (using this handy comparison tool, or looking at this website).

I have looked at all the fixed, variable and capped mortgages, and I think the best deal would be something like the Nationwide fixed 5 year mortgage. The interest rate is a fairly low 5.09%, and you can make overpayments of up to £500 a month. I'm pretty scared of the variable mortgages as I haven't got a clue where interest rates are going, but I do know that I don't like the idea of house repossessions.

I like the idea of being able to make over payments, especially in the early years. This will drastically reduce the amount of cash I have to pay over the entirety of the mortgage. Without mortgage overpayments, of the £700 a month I would be paying only £200 goes to paying off the original loan, the rest is to pay the interest! I can see why it takes 25 years to pay off the full loan..

I really ought to write an article about the different forms of mortgages that are available. I'll look into that, but in the mean time I have come across an excellent glossary which explains all the confusing terms that are used when referring to mortgages, and Whatprice already has an article or remortgaging, and home mortgages

Looking at Houses in my Area
22 April 05

Armed with my 150K I have started looking for houses in my area.

My dreams of a 5 bedroom detached house in the city centre right next to the train station are quickly dashed.

Looking at Sensible Houses in my Area
23 April 05

However on further looking things are too bad. I could afford a two bedroom flat, or a slightly run down 2-3 bedroom terraced house in the city centre. Looking further afield (up to 5 miles out) my 150K would stretch to some fairly decent looking 2 or 3 bed houses in top condition. If I were prepared to move even further out of town, perhaps to one of the newer towns such as Cambourne I could probably get myself a nice semi detached. However I don't think I want to live that far out, and I'm not exactly keen on those 'manufactured' towns.

I'm happy to get something that is "in need of improvement" (as is often quoted on Estate Agents website's). After all, I have an entire DIY website and so a little bit of wallpapering or woodwork isn't going to put me off!

The next step is to go to a bank or building society and talk to someone about my mortgage. Although I have pretty much decided on what I want i think it is still best to talk to the experts. Also I have made some assumptions about how much I can borrow and I need to get these confirmed. Hopefully i will get to the banks in the next couple of weeks..

House Buying Advice
26 April 05

Whatprice have taken on a new writer, and as luck will have it the first thing they have worked on is some advice on buying a house! Two pages have been written, first step by step instructions , it will be interesting to see if I actually manage to follow them. The second is a guide to "all those things you really need to know about house buying, but where afraid to ask", but this one is different to all the rest, it appears to be written in English!.

Mortgage Protection
04 May 05

Everyone should get mortgage protection right? I mean that's what all the banks tell you anyway. Well I decided to look into it in a bit more detail, after all I do want to avoid the nightmare of house repossessions. I found this policy, which i think is fairly typical.

1. If you're off work due to incapacity caused by accidental bodily injury or illness for more than 30 consecutive days we will pay the mortgage payment for every month you're off work, or part of your payment for every day you're off, for up to 12 months
   
2. If you're involuntarily unemployed for more than 30 consecutive days, we'll pay the mortgage payment for up to 12 months
   
3. If you die as a result of accidental death, we will pay a sum equal to £20,000."

All sounds quote good, but wait a minute..

I already have an insurance policy that provides my salary for life if I get injured, so point one isn't needed. The second point seems quite good, but it is only for 12 months? And after the first 30days? I may be being a bit arrogant here but I reckon it wouldn't take me much longer than a month to find a new job, a nice bit of temp work isn't that hard to find around here. And point 3? Well I have life insurance, and I'll be dead, so another 20k isn't going to make much difference to me!

So this policy doesn't seem 'quite' as great as I first thought, but there is more, the cost of the policy is 5.45% of each mortgage payment, which for me would be around £700 a month. So I pay an extra £38 a month for the plan, that is £11,400 over the entire mortgage! But more importantly the protection will only pay out up to 12 months of repayments, which is only £8400. So if I take out the protection policy I am guaranteed to pay more in insurance premiums than I will EVER get out of the policy, even if for some reason I am off work for 12 months. This does not sound like a good deal to me.

Instead I am going to look at making overpayments on my mortgage which will firstly reduce the overall interest charges, and secondly mean that I can take a payment 'holiday' if I do have the misfortune to be made unemployed.

I am also going to look at one of these 'unemployment' insurance policies where you receive a certain percentage of your salary if you are involuntarily unemployed. It may be that these policies are cheaper than the banks own mortgage protection scheme. It wouldn't surprise me!

I had a quick look on the internet, and to cover a £700 mortgage would cost me £15 a month from an online insurance broker. This would completely protect me from the threat of house repossessions at a fraction of the cost of standard mortgage protection scheme . There is an initial period of 6 months where I cannot claim, but other than that the terms and conditions look pretty similar. So that policy would save me £!9 a month, or £5700 over the term of the mortgage.

I have spent the weekend surfing the web looking for the cheapest mortgages around, I know this is a bit of self promotion for the site but this comparison tool is really handy! I seem to have settled on two, the one I originally saw at the Nationwide, which is 5.09% fixed for five years and then followed by their standard mortgage rate which is no less than 2% above the bank of england base rate, and at the moment stands at 5.99%. However on further digging I have found the Alliance and Leicester mortgage which offers 4.99% for 5 years and then the bank of england base rate +0.75%, and so is currently 5.5%. So marginally cheaper. Both seem to offer the same sort of arrangement fees and the same exit penalties and overpayment restrictions, so all being equal I now favour the Alliance and Leicester mortgage

Have spoken to Alliance and Leicester and they will loan me 4 times my salary (this is fairly typical but some places only offer 3.5 to 3.75 times). If I could put down a 25% deposit they would offer even better terms, but I don't think that is very likely really.

Am waiting for a phone call bank from Nationwide to talk things through with them too.

House hunting
06 June 05

Armed with a new offer from Alliance and Leicester of 4.25 times my salary house hunting has begun in earnest. I went to see 3 houses today.

The first was a very run down 2 bedroom, with each room requiring a complete strip down and redecoration. Although I relish a challenge I could see the costs rising and rising on this one and suddenly the asking price didn't seem quite so cheap!

The second house was absolutely perfect, excellent location near the station, decorated to a high standard and to my taste, ample sized rooms and a good layout. So good in fact that I went and made an offer straight away! Sadly I cant quite stretch to the asking price and have a feeling that I will ultimately be rejected.

The final house. Well it was nice, clean, well decorated, but lacked character. Location was also quite poor, adding another 15mins to my drive.

It seems I have spoilt myself by going to see a fantastic house that is out of my price range. I need to take stock and start being a bit more realistic. In the mean time I have started to look at the TOTAL cost of buying a house, it is tabulated here.

Making an offer on a house
08 June 05

I went back to visit the 'perfect' house today, and although it isn't actually quite perfect I still like it and am prepared to up my offer slightly. Spent a long time with the owner talking through the various issues with the house and what would be included with the sale price. So tomorrow I talk to the estate agent, put in my (nearly) finally offer and see what happens!

Offer stalemate
10 June 05

The owner of the house seems unwillingly to budge much below the asking price, and I just cant go any higher. This is the impasse that housing market reports often talk about, the seller refused to move, and the buyer has already put in their highest bid! I shall have to move on.

More house hunting
11 June 05

Off to see a few more houses, some seemed quite nice, but there always seemed to be something wrong with each one! Have pretty much exhausted all potential houses that are on the market at the moment, so will have to wait for more sellers to appear.

Another potential House to Buy
12 June 05

Found another little gem, far more central than other houses, a bit more modern, and has the added bonus of a conservatory! Will go and take another look, but probably will put an offer in on this one.

Second Look
14 June 05

Am convinced. The place is pretty cheap for what it is, and there are no obvious flaws with it. Nice quiet back garden, the estate it is on seems okay, only 2 miles to the centre of town yet right on the doorstep of a lovely village. The bedrooms are of a reasonable size and so is the kitchen. The conservatory isn't the best in the world, but it will be great in the spring and summer. Placing a nice low offer to start with...

Offer Rejected
15 June 05

Seems to be the same old story, the seller is sticking to his guns despite the fact that we are the only people interested. I have upped the offer slightly, but that hasn't had any effect and the seller wants to wait until more people have seen the house first. I think he is trying to get a bidding war going.

Offer Rejected
16 June 05

Seems to be the same old story, the seller is sticking to his guns despite the fact that we are the only people interested. I have upped the offer slightly, but that hasn't had any effect and the seller wants to wait until more people have seen the house first. I think he is trying to get a bidding war going.

No housing bidding war
26 June 05

The seller has had nearly two weeks to stew and it appears that no-one else has made an offer for the place. I have upped my bid slightly and he seems to be lowering his expectations, so fingers crossed we will get somewhere eventually! I still want things to move quickly as the last thing I want is to get into a bidding war with someone else over this house.

House offer accepted!
28 June 05

Its my birthday, and no better way to celebrate than to finally succeed in buying a house! Well okay, so I have only had an offer accepted, but it is a step in the right direction. And with only one month of house hunting. Now the painful stuff starts with solicitor and bank fees rolling in...

Banks and Solicitors
29 June 05

Spent the day talking to banks and solicitors and hopefully have everything moving in the right direction. So far have spend £480 on a house valuation and homebuyers survey, and £110 on solicitors fees for an environment search and a 'local council search'. It is very painful spending this money with no guarantee that the house deal will go through, but it has to be done! One good bit of news is that the bank has lowered its interest rates on the fixed mortgage, mind you I had to TELL them to put me on the lower rate, if I hadn't of noticed they would have just carried on regardless.

Also went back to the house for the third time (once the estate agent had decided to turn up - he 'forgot' about the visit). Crawled all over the house this time, checked all the gas, electrics and plumbing (it has a water meter which is good news). Everything seemed in good order, the conservatory does need some work on it (i.e. knocking down and starting again), but apart from that and one outside light not working I could find little fault!

Getting things moving
10th July 05

Mild frustration at banks and solicitors. The bank got my name wrong on the mortgage application and so that has held things up a little bit. The solicitors seem unable to embrace the modern world and insist on sending me letters instead of the usual email or phone calls. I'm constantly surprised not to find a wax seal on the envelopes, after all "that is how it used to be done, why change?"

One hitch was that the sellers solicitors were being very slow to send a 'letter of instruction' to my solicitors. I did get a nice letter telling me that they are 'waiting' for the correct legal documentation, what they FAILED to tell me is that it is unusual to have to wait, and that perhaps I should phone up the seller to found out what is going on.

Basically I have learnt that you must phone up every few days, ask how things are going, then ask what they actually mean by that, and then ask what you should do to correct the inevitable problems. Otherwise when a problem comes up they will just go "oh well", and put it all to one side until you contact them. NOBODY is pro-active in anyway, except you!

Completion Date?
12th July 05

I have the feeling I have been lied to. At the start of this we were told that there were 'no problems' in getting the house bought as soon as possible. I.e. no chains. However the earliest the completion data can be is the 1st of October as that is when the vendor is released from redemption charges on his mortgage. Very irritating but not a lot I can do about it!

Structural Survey
13th July 05

"cracks were noted in the brickwork of the rear side elevations which appear to be of some age but are not considered to be serious or progressive. Thought it is likely movement has ceased, no assurance can be given this is the case, as my inspection was of a limited visual nature"

Oh dear! Having spoken to the surveyors apparently this shouldn't be a problem and they do not think it is a structural issue. There are some measuring studs present on the wall which means that a proper analysis of the crack growth rate was performed in the past. I shall try to find out when this was done and what the conclusions were.

The problem is not serious enough to stop them recommending buying the house, or to prevent them from certifying the building suitable for security on a mortgage. Still, it is a bit of a concern.

Environmental Search
16th July 05

Phew, the environmental search shows that my house isn't built on an open mine face, nor is it built on an old nuclear power plant. I was worried about that! The whole place got a clean bill of house and shouldn't cause a problem in the future. I believe that if any hazardous pollution is found on your land then you are liable to clean it up, potentially costing tens of thousands. An environmental search is good for piece of mind, and should only cost around 40 pounds.

Where are the contracts?
11th August 05

So it is one month later, and still no contract signed, my solicitors have completed all the searches and are just waiting for one question to be answered with regards to planning permission with the conservatory that was added. It is a bit crazy as the conservatory is less than 70 cubic meters and doesn't make the house 15% larger. and so does NEED planning permission. Heck I'll knock it down if they want me too, if it will get this deal signed quicker!

So a frustrating month where little has happened except solicitors messing about and getting nowhere.

House Buying is Happening?
21th August 05

Suddenly it all came together, the conservatory details were sorted, the vendors solicitors realised that this house WASNT in a chain and so didn't need to wait for anything else, and we were away! Things may have been helped along by my threat to pull out if it wasn't sorted by the end of the week, but who knows...

Moving House
15th October 2005

The house move came and went. Pretty painless really but have been too busy to write it all down. We got all the stuff moved in one day and 3 days later I think we were pretty much settled. The bathroom sink is still blocked, but that will get fixed soon..

Dealing With Household Utilities
30th October 2005

Arrghhh, what is wrong with these people?!?!!? To cut a long stories short I shall deal with each company in turn and try to limit myself to a paragraph for each of them. I am mentioning names as I think they deserve it, and I heartily encourage anyone reading this to think twice about which companies they use.

Mortgage Company (Alliance and Leicester)

Despite one phone call and a written letter they have still charged me for household insurance that I DO NOT WANT. I have insurance with Direct Line, they are very good, quite cheap, and offer excellent round the clock telephone service. Alliance and Leicester's insurance is expensive, not that good, and keep taking money out of my account despite me telling them not to. Make sure when you set up your mortgage that they do not take out insurance for you!

Telephone Company (BT)

BT have (eventually) given me a telephone line, however I would like to get Broadband, but I cannot sign up without an account number. They will not give me an account number over the phone, saying that I will get one with my next bill. 4 weeks of waiting and still no account number or broadband...

Old Telephone Company (NTL)

Despite phone calls and letter writing they are still charging me for my old telephone and broadband account, instead of changing over to the new residents of my old house. I would just cancel my direct debit but I suspect that this will cause them to send me a court summons or something and ruin my credit rating. Luckily I am on good terms with the new occupiers of my old house and they are just giving me the money for the bills until NTL start listening to us. It is a difficult concept I know..

"Dear NTL, I do not live at that house anymore, here are the details of the new people who live at that house, please send them the bill instead"

Council Tax (Cambridge County Council)

I live in this house with my partner, she is studying to be a medic and as such is exempt from Council Tax. This should mean that we get a 25% reduction in council tax, but despite telephoning and writing letters they are still trying to charge me for the full amount.

Gas and Electricity (Scottish Southern Electric)

These guys seem to have come up trumps, they somehow managed the almost impossible job (sic) of actually changing the bill to be in my name rather than the previous owners, and they also seem to have the correct meter readings. I don't have a bill yet mind you, so there is still room for them to mess up.. watch this space

Home Sweet Home
24th December 2005

Merry Christmas to you all! It has been a busy couple of months and so I haven't had a chance to update this blog for a while. To cut a long story short, all the utility companies have been shouted at and all is sorted. In response to the utilities bills that I have to pay Whatprice have launched a new Utility page that compares the cost of gas, electricity and water etc.

Small jobs have been completed around the house, including some new guttering on the shed, a few trees have been removed. A block sink has been repaired (but not before the hallway was flooded), but the biggest upheaval has been a brand new kitchen. Many thanks to my Dad for paying and installing this kitchen (he runs a kitchen company so kind of did it with his eyes shut). This was such a big improvement to the house that it deserves its very own DIY kitchen page.

Check out our online mortgage comparison tool for the best rates and deals available for mortgage