I’m a mortgage expert and here are six red flags for first-time buyers

IT’S easy to get caught up in the excitement of buying your first home, but newbie buyers need to watch out for some red flags.

The dream of getting on the property ladder can mean it’s easy to miss some warning signs that could cause you problems later down the line.

First-time buyers should be on the look out for these red flag when buying a property

First-time buyers should be on the look out for these red flag when buying a propertyCredit: London & Country

Some issues could cost you thousands in DIY or remedial work costs, while others could mean you can’t get a mortgage to buy the place.

David Hollingworth, director at mortgage broker London & Country, says it’s important not to miss some telltale signs of problem properties.

The property expert says it can be particularly hard for first-time buyers to know what to look out for, especially when there is fierce competition for properties. 

Here are some of the red flags to watch out for. 

Non-standard construction

As the Three Little Pigs discovered when the wolf came knocking, houses are best built out of a standard material like brick.

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Properties made of anything unusual can give mortgage lenders pause for thought, and could see your application refused. 

David says: “Some construction methods, such as concrete, have suffered issues as time goes on, so lenders may want to be sure that remedial work has been undertaken before they grant a mortgage.”

Other lenders will be happy to give you a mortgage after the property has been valued – but you should be sure to get a survey done to make sure you’re not set to face costly work in the future. 

“Flag anything unusual to make sure it’s factored in when you’re pinning down the right mortgage deal and the right lender,” says David. 

Get a survey

Unusual construction is just one reason you should get a survey.

It’s easy to get sucked in by a newly decorated home when you’re viewing properties, but you want to be sure that fresh lick of paint isn’t covering up something more troublesome such as damp. 

A homebuyers survey is the middle ground between the simple valuation survey and the full structural option, which can be very costly. 

David says: “Knowing upfront that the property is sound or what work may need to be done will give you a clear picture of costs on the way in – and may even mean you can negotiate on price.” 

Flat above commercial premises

A flat above a shop might be cheaper – as well as convenient if you need to pop out – but there’s often a reason it a property seems like a bargain.

Properties above commercial premises can prove a stumbling block when applying for a mortgage.

Many lenders will be concerned the property will be harder for them to see on if the worst should happen and they had to repossess it.

David says: “Lenders want properties will wide appeal and being above a commercial premises can limit that, especially if you’re over a takeaway restaurant which could bring smell and unsociable hours into the question.”

It’s not impossible to get a mortgage on such a flat, but it’s worth keeping in mind that it could be harder to sell when you come to move.

Japanese Knotweed

The dreaded plant can look pretty in the garden, but can be a nightmare for homeowners.

Japanese knotweed is an invasive species, which can cause damage to property and outbuildings. 

It’s hard to get rid of and needs to be done by a specialist, who will dispose of it correctly and give guarantees against recurrence. 

David: “If the valuation picks up knotweed then there may be implications for the mortgage. 

“That will usually depend on how severe the problem is and the proximity to the property – so a problem next door could even have an impact.”

Lenders are now more flexible on this than they have been in the past, but it can still be an expensive problem to have.

Leasehold properties

If the home you’re buying is leasehold rather than freehold, you’ll want to check the small print.

Leasehold contracts have come under fire in recent years for their punitive charges and while this has improved, you still need to be careful what you’re signing up for.

Find out what the service charges and ground rent are – and check for any clauses which state how much these can increase by.

David says: “If it’s a lot, this could put buyers off in the future and lenders may not be prepared to lend unless the clause is within their acceptable parameters.”

There have been cases where some homeowners have seen their ground rent double every few years, costing them tens of thousands of pounds.

You should also find out how long is left on the lease – mortgage lenders don’t typically like it to be less than 80 years and it can costs thousands to get the lease extended.

Solar panels

Energy efficiency is a top priority for many households, particularly as bills are rising.

But solar panels can occasionally cause a problem for buyers and is something you should flag to your mortgage lender.

If you’re buying a home with solar panels on, make sure you understand if they are owned outright or subject to a lease agreement.

David says: “In the past, some lease terms didn’t match with lender requirements although there are more mortgage providers that will be able to accept them now. 

“However, some lenders may want them to be owned outright, so it can just be something to look into so you can flag it from outset.”

Solar panels could also affect your ability to resell the property in the future as some buyers find them off-putting, so this is also worth bearing in mind.

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